YOU HAVE QUESTIONS, WE HAVE ANSWERS!
VIVA ESCROW Q & A SEGMENT
(Real questions sent to us – verbatim!)
QUESTION:
If Party A is looking to buy a location from Party B to operate a new business, will we need an escrow to handle the transaction? Party B is not actually selling his business. Just the location. Party B is moving his existing business to another location.
ANSWER:
The main purpose of doing a business sale escrow is to protect a Buyer from a Seller’s responsibilities of payment to creditors, vendors, and tax agencies of the business being sold. However, in your case, Party B IS NOT selling his business but just moving to another location. This isn’t a purchase of an existing business and so there is no need for a business sale escrow transaction. In your case, if Party A has agreed to pay Party B money to take over the location, then they would handle this payment between themselves. Before they do that we strongly recommend that Party A negotiate with the Landlord first and make sure they are approved to take over Party B’s lease.
EDUCATIONAL MOMENT:
Just a tip for those of you who are thinking of buying a business. You should always do an escrow because when it is done properly, it protects the Buyer from Seller’s tax and vendor liabilities. Watch out for this important term – “Successor Liabilities” – which are Seller debts that a Buyer might become responsible for if not paid.
Under California Bulk Sale Law, a business may be exempt from following this law if the business is sold for under $10,000 or over $3,000,000. Even so, successor liabilities are always an issue no matter the value of the business. It is always a benefit to the Buyer to have a knowledgeable escrow officer handle the business sale/purchase. This is that proverbial ounce of prevention!
See my YouTube video offering below for a link to the “Art of the Bulk Sale” (part 2)
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~ Video of the Month ~
Are you an amateur photographer? You will love these
Pictures Taken At The Right Time!
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~ Quote of the Month ~
“Thirty years ago, we had Bob Hope, Johnny Cash, and Steve Jobs. Today we have no hope, no cash, and no jobs.
We are all praying nothing happens to Kevin Bacon.”
~ Unknown Contributor ~
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As a continuation of Part 1 which was offered in our March 2024 blog
(please note, this is an educational video so it is 15 minutes long)
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You Have Questions? We Have Answers!
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
“Escrow is my FOREMOST language!”
Advance Disclosure:
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.
Info @ VivaEscrow.com