Use a Business Bill of Sale to set out the terms for the sale of a business and transfer the ownership and all assets to the buyer.
Published March 20, 2023
Written by Josh Sainsbury | Reviewed by Brooke Davis
A business bill of sale is an important and necessary component to complete when selling or buying a business. The bill of sale is often legally necessary for a business sale.
When completing a bill of sale for business, you can use a template to ensure that all required components are included. The business bill of sale template is an effective guide that walks you through the steps needed to complete the transaction.
A business bill of sale is a legal document that recognizes the change in ownership from one entity to another.
Buyers and sellers agree upon the key terms of the sale, including the purchase price and other particulars. It’s often the culmination of negotiations between a buyer and seller and is designed to detail the specifics related to the sale.
The bill of sale is proof of a business ownership transfer. Depending on the type of business, the bill of sale may include information on stock or share transfers and other company assets. It may also include information about the role of the previous owners in the business following the sale.
State and local governments often rely on a bill of sale to determine proof of ownership. Submitting a bill of sale is often necessary to transfer licenses and permits or complete registrations for the new owners. Without a bill of sale, business ownership may be disputed.
There is a significant difference between a business bill of sale and a business purchase agreement.
The purchase or sale agreement is designed to help negotiate a future sale or purchase of a business. It is often used in the initial stages of negotiation about the transfer of a business. Some consider it a draft of the future business bill of sale, a legal, formal document that details final terms.
It’s a way to determine the structure of the business, what’s for sale, and various considerations. It may include suggested sale prices, the assets for sale, and the terms and conditions of a potential sale.
It may be used to draft the terms of the sale following negotiation. It can also spell out any conditions necessary for the buyer or seller to complete before a sale is finalized.
Once those conditions are met, the parties often move to a business bill of sale.
Determining what to include in your bill of sale is fairly straightforward. There are standard items to complete, though additional items may be necessary based on local or state laws. The typical items are:
A buyer can acquire a business in one of two basic ways. One is an acquisition of the shares or interests of the business, known as a stock sale. The other is a purchase of the business assets, an asset sale. Each type has tax and liability consequences.
A stock sale is a simpler process that typically involves a single bill of sale. However, a buyer can have more liability in such a transaction. The buyer is responsible for pre-sale liabilities, including defective products, warranty commitments, and tax obligations.
In an asset sale, there can be additional complexity and may require multiple documents. With an asset sale, the buyer has more control and can negotiate which assets they will purchase. For example, the buyer can contractually limit their liability within a bill of sale for business assets.
Here’s a closer look at the steps necessary to complete a business bill of sale.
Begin by dating the bill of sale and filling in all buyers’ and sellers’ legal names and addresses.
Include the state where the company is incorporated, the address of its headquarters, and all assets, shares or interests, and property that will be included in the sale.
Fill in the purchase price, including any terms and payment schedules in the final sale agreement.
You will want to have the business bill of sale notarized. In person, you will sign the bill of sale in the presence of a public notary and have it witnessed.
A business bill of sale template is an easy, convenient way to complete the necessary legal documentation. The template below includes all the information needed to finish your transaction.
You will likely need multiple documents when negotiating and preparing a business bill of sale. Here is a list of some of the most common documents necessary when selling a business:
Create your Business Bill of Sale today!
