Business Bill of Sale Form (MS Word)

Business Bill of Sale Form (MS Word)

When selling or buying an existing business entity, you will need to demonstrate the transfer of ownership by preparing and signing a bill of sale. The bill of sale will outline the entire transaction and define the related terms of the agreement. Additionally, it will help the buyer file their taxes and apply for the necessary business permits. The bill of sale will likely be accompanied by a purchase agreement, which goes into detail about the new contract.

On average, the process of changing the ownership of a business can take six months to a year and involve many professionals. This article explains how a bill of sale fits into this process.

What Is a Business Bill of Sale?

A Business Bill of Sale is a formal legal document that acts as a record of the transfer of ownership of a business entity and its assets from the current owner to an interested buyer. It defines the terms of the transaction, describes the business being sold, and identifies the buyer, seller, purchase price, mode of payment, and payment date. Overall, it is key proof of the final transaction and can be used to protect either party from future disputes concerning ownership and liability of the business or its assets.

Business Bill of Sale (Word Template)

Business Bill of Sale 20210831

A business bill of sale form is a printable legal template that details the transfer of ownership of a business and its related assets from the current owner to an interested buyer.

Download: Microsoft Word (.docx)

    Process of Selling Your Business

    Step 1: Determine the Value of the Business

    The value of your business will likely have changed from the date you acquired or started it and the only way to determine the current value is to hire an evaluator. They will consider your risk, potential for growth, and financial performance to give you a workable estimate.

    Step 2: Gather the Necessary Documents

    With a selling price in mind, you can now go about collecting the following relevant documents:

    • Company information: Company information summary, employee list, security reports, evaluations, competitor reaearch, operations information, client list, company bylaws, marketing strategy, and media accolades, if any.
    • Accounting details: Balance sheet, tax returns for the last 3 years, cash flow sheet, profit and loss statements, and bank statements.
    • Legal documents (legally required documentation to sell a business): Revenue documentation, letter of intent, non-disclosure agreement (NDA), ROI analysis, stock status, assignment of leases and licenses, asset acquisition statement, supplier agreements, and articles of incorporation.

    It is crucial that you involve your attorney in the process of preparing these documents.

    Step 3: Advertise the Business

    Next, have a team create a professional and catchy advertisement for your business and post it in the business classified or on business-specific platforms like BizQuest, BizBuySell, and Business Exits. Make sure the advertisement includes pictures of the business and information like the business location, type, and selling price.

    Step 4: Close the Sale

    Negotiate with the potential buyers that contact you about the business. You will want to have your attorney present in these meetings to review any contracts and offers so your interests are always protected. Once you and a buyer reach an agreement, set a closing date, iron out the terms of the contract, and prepare to complete the sale.

    On the closing date, bring the legal documents discussed in step 2, accept the funds, and sign the contract and bill of sale.

    Business Bill of Sale vs. Purchase or Sale Agreement

    A business bill of sale and purchase or sale agreement are sometimes used interchangeably to mean a record of the sale of a business and its assets. However, the two are different, especially in the nature and timing of their use. Think of a purchase or sale agreement as a promise of a future transaction and a business bill of sale as a receipt of that transaction. Here is how:

    A business bill of sale records the sale and transfer of ownership of a business entity and serves as proof of the final transaction. On the other hand, a purchase or sale agreement allows the involved parties to negotiate a future transaction. It is commonly used in the early negotiation stages to discuss terms but does not recognize a sale or purchase or prove a change of ownership.

    How to Fill Out the Business Bill of Sale

    The basic inclusions of a Business Bill of Sale tend to be the same across the board. That said, you might need to supply more information depending on the governing state (where the transaction is happening) and the terms of sale. Here is a guide on filling out the bill of sale:

    • Step 1: Supply the date the agreement is being prepared.
    • Step 2: Indicate the buyer’s name and mailing address and do the same for the seller. It is important to verify these details from the parties’ government-issued IDs.
    • Step 3: Indicate the following details about the business: name, main headquarters address, shares, assets, personal property, state of incorporation, and other included interests.
    • Step 4: State the business purchase price, payment method, and date of sale (when the buyer must pay the purchase price).
    • Step 5: Define other terms as related to the agreement, e.g. down payment and evaluations.
    • Step 6: Sign the bill of sale and supply the signature date. Have the other party and witnesses do the same.
    • Step 7: Get a Certificate of Acknowledgement from a notary public for extra insurance.

    Business Bill of Sale Format

    This Bill of Sale was created on {date} in {county, state} too record the purchase and sale agreement between the Buyer {buyer’s name} of {mailing address} and Seller {seller’s name} of {mailing address}.

    The Seller affirms that they are legally allowed to sell the business known as {business name} incorporated in {state name} with a principal office in {city, state name}. The Seller also elects to sell all the shares, assets, personal property, contracts, employees, leases, ownership interest, trademarks, and copyrights associated with the business.

    The Buyer agrees to pay a purchase price of {amount} to the Seller on {date of purchase}. The Seller, in turn, agrees to educate the Buyer on the practice of the described business before, during, and after the exchange of ownership.

    This agreement shall be considered final and effective upon the execution of the following signatures:

    Buyer {signature}, {signature date}

    Seller {signature}, {signature date}

    Witness (if any): {signature}, {signature date}

    Final Thoughts

    As a way of minimizing the risks associated with a new business, many entrepreneurs prefer to purchase an existing business entity than build one from scratch. In such a transaction, a Business Bill of Sale is a crucial, must-have document that can protect the buyer and seller from future disputes, legal or otherwise. The document will contain all details relevant to the transfer of ownership, such as the buyer and seller identities, business description, and purchase price, effectively creating legal proof of sale.