Whether selling or buying a business in Florida, the process requires a diligent legal and financial evaluation. One of the most demanding aspects of business transactions is the number of documents the parties involved need to create, review, disclose, or handle during the process.
In this article, you will find out the essential legal documents to buy or sell a business in Florida.
Purchase and Sales Agreement
Different businesses have distinct structures and sizes. Hence, transferring ownership of a business involves several documents. The key element of any business acquisition is the purchase and sales agreement.
If the company is only buying or selling its assets or membership interests, the document will be referred to as a “stock purchase agreement” or a “membership interest purchase agreement.” The purchase and sales agreement outlines all terms involved in the sale, such as:
- A description of the assets involved in the transaction
- The value of each asset being sold or bought
- Whether the buyer will acquire the company in whole or part
- The balance of tangible and intangible assets involved in the transaction
- Restrictive covenants (if agreed between the parties)
- The assignment of any of the company’s existing contracts
- The payment terms
- Payment protection clauses
- Whether the buyer will put down a down payment
- Whether the buyer will use financing or pay the agreed sales amount in installments
Due Diligence Documentation
During the due diligence, the buyer must review the information provided by the seller to verify its accuracy. This process is vital to ensure the financial and physical condition of the company before the signature of the purchase agreement.
Proper due diligence involves a detailed review of several documents, including:
- Profit and loss statement
- Balance sheets
- Tax returns
- Sales records
- Business valuation
- Existing contracts and Leases
- Debt disclosures
- Marketing and advertising costs
- The condition of the company’s assets
- Licenses and permits
- Supply contracts
- Client agreements
- Employment contracts
- Intellectual property paperwork (e.g., registration documents, etc.)
- Pending litigations (if any)
- Compliance with laws and regulations
Before disclosing the documentation required by a buyer, some Florida companies may require a confidentiality agreement to guarantee the protection of sensitive business information.
Closing Stage
Considering the number of documents and procedures required within a short period, ensuring a smooth closing is a complex task. The best approach is to work with an expert legal advisor to prepare, negotiate, and handle all the necessary documents, such as:
- A final inventory of the transaction
- Bill of Sale and General Assignment
- Closing statements
- Warranties and indemnities (legal protection)
- Corporate resolutions regarding the sale (if applicable)
- The seller’s affidavit affirming that the business has no liens or obligations besides those already disclosed
- Corporate books (if the buyer is buying the whole company)
- Promissory note (only applicable if the buyer is financing the purchase)
- Amortization schedules (if applicable)
- Business security agreement (only applicable if the buyer is financing the purchase)
- UCC filing for the security (only applicable if the buyer is financing the purchase)
- Stock certificates
- Business asset allocation agreement (for tax purposes)
- The transaction’s closing agreement
Legal Documents Needed to Buy or Sell a Business in Florida – Contact Attorney Romy B. Jurado Today
Immediately contact Attorney Romy B. Jurado by calling (305) 921-0976 or emailing [email protected] for expert legal assistance.
