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ABA Family Legal Guide

Forming and Operating a Small Business

Franchising and Buying a Business

Buying a Business

What does the closing process involve?

Just as in a real estate transaction, the closing process involves signing the final purchase papers of the purchase and sale. Here's some of what may take place.

  • Often, you won't know the final purchase price until closing, when it will be determined in accordance with procedures set forth in the contract. The actual purchase price may depend on such procedures or events identified in the contract as inventories of assets, final accounting for payments received, and identification of certain receipts after initial periods of operation under the new owner.
  • At closing, the seller, and often the buyer, will be required to certify that the warranties and representations given in the contract, which will remain the basis for a legal action after the closing, were and are true, accurate, and correct.
  • You and the seller will sign the documents of transfer, and you will sign documents relating to payment and usually make a payment.
  • The contract may provide for certain allocations of payments or deposits between you and the seller.

    Typically, at the end of the closing process, the seller will have accomplished the transfer of the business to the buyer. You will have paid for the business and will take possession of it.

    • American Bar Association Family Legal Guide
    Copyright © 2004 American Bar Association
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