Commercial And Business Transactions

In general, Seller’s attorney drafts a contract and the parties’ attorneys negotiate on the terms and conditions of the contract, and upon agreement, the parties sign the contract.

Purchaser inspects the business during some certain period set forth in the contract called “due diligence period.”

(If purchaser is obtaining a loan) Prior to or after the due diligence period, Purchaser applies for a loan.

Purchaser’s attorney run searches against Seller to see if there is any UCC-1, other lien, or judgment filed against the Seller. If so, Seller should discharge same prior to or at the closing.

Purchaser’s attorney files a bulk sales form with the State Department/Division of Taxation to see if there is any tax due (In New York, Purchaser pays for taxes on equipment/machineries, etc v. In New Jersey, Seller pays for any overdue taxes owed).

Once a contract is executed, Purchaser’s attorney reviews a new lease agreement or lease assignment and negotiates with landlord.

The parties get together (with the Purchaser’s lender if applicable), sign closing documents, lease, loan documents, etc. and exchange money, keys to the business, etc.