What Is a Business Bill of Sale?
A bill of sale refers to a legal document that assists sides in recording transaction information. Such papers are printed out and filled by the sides participating in the deal. Bills of sale don’t require inviting independent witnesses to obtain legal power, which allows using them under any circumstances. Business bills of sale must include detailed descriptions of the company being sold, the buyer and the seller, and the payment method utilized to close the deal.
It’s worth noting that bills of sale were created for individual usage. Publicly owned organizations are not allowed to use these documents and must consider other options for trading goods. However, if you are the only rightful owner of a business, you may use bills of sale on behalf of your company. A business bill of sale form is required to register a newly obtained company, so you should use these documents whenever purchasing an organization.
How to Create a Proper Business Bill of Sale?
Mind that business bills of sale involve detailed descriptions of the companies being sold. Here are the major points of consideration on a bill of sale:
- Information about the sides. This is the first section on any bill of sale. It should contain the buyer’s and seller’s names, mailing addresses, mobile phone numbers, and emails. The date of sale should be specified here as well.
- Details of the transferred business. This section provides a detailed description of the organization, including a comprehensive list of its assets, liabilities, shares, and other corporate property. The address of the main headquarters and state of incorporation must be mentioned as well.
- Transaction information. The payment method (or methods) utilized to close the deal, the purchase price, and the date of money transfer are specified in this section.
- Signatures of the sides and witnesses. After reading the paper carefully, both sides should sign the document. Mind that every participant should receive a copy of the bill signed by all other sides. If the deal involves independent witnesses or a public notary, they must sign the document as well.
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How to Sell a Business with a Bill of Sale?
To sell a business successfully, you’ll need to collect a comprehensive set of documents. This includes your tax statements for a minimum of three years, a description of all assets owned by your company, and an operating manual. You’ll also need a list of employees along with their payrolls, non-disclosure forms, financial statements, insurance forms, and contacts of all clients. After obtaining the necessary papers, meet with a buyer to finalize the deal. Although you aren’t required to invite a public notary, their presence guarantees further transparency to the deal, so engaging independent witnesses is strongly advised.
Differences Between Business Bills of Sale and Sale Agreements
Sale and purchase agreements are not to be confused with bills of sale. The bill records the transition of ownership and acts as proof of this transition. On the other hand, sale agreements record information about future deals. Such documents are mainly used in the initial stages of negotiation. Signing a bill of sale results in the transition of ownership, while sale agreements are, essentially, written promises of future transactions.
Advantages of Business Bills of Sale
Bills of sale are fairly simple to utilize, and they don’t require much knowledge of jurisprudence. They obtain legal value once signed, which allows the sides to transfer ownership over assets immediately after closing a deal. Although bills of sale were initially created to record transaction information, they can act as proof of ownership if needed. For instance, courts and banks will consider bills of sale when estimating the value of one’s assets or investigating property-related crimes. If you are qualifying for a loan, a business bill of sale will be useful to prove that you own some valuable property.