BlogBuying a BusinessRestaurantStartupsBuying a Business: What is a Closing?

December 8, 2021by Jeffrey Davis

Ah, the closing. Where weeks or maybe months of waiting, questioning, follow ups, and unnecessary stress all come to their final stages. What’s the big deal about a closing? To be honest, nothing. A purchase agreement was signed already. Due diligence was completed. Basically you’re dealing with the exchange of funds, a bill of sale, and any whatever adjustments the parties agreed to in advance vis a vis the purchase agreement. I find most closings can even happen by mail rather than an in-person meeting.

At a typical closing the parties exchange a signed bill of sale as I mentioned above. The parties will also sign things such as assignment agreements (e.g. assignment of the lease, trademarks, copyrights, patents, etc.), leases, financing agreements, corporate documents (e.g. resolutions approving the deal), and if applicable other agreements in furtherance of the transition of the business.

As to the last point, some agreements the parties might sign that pertain to the transition of the business are as follows: a transition services agreement where the seller (or someone from the seller company) agrees to assist the buyer in transitioning the business in all respects. This may include proper introduction to key business relationships, or scheduled education and guidance on technical aspects of the business.

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