Years ago, when a business was bought or sold in Florida, the paperwork associated with the transaction was anything but standard. To compound potential problems, brokers were unlicensed and unregulated. Consequently, when papers were passed across the table for signature, a buyer or seller may have had concerns about potential “gotcha’s” lurking in the forms. Sometimes, those concerns were valid. Today the “paperwork” and your broker are very different – and buyers, sellers, brokers and the industry are better for it.
The goal: No surprises.
The result: No “gotcha’s” and BILLIONS of dollars worth of business sales in Florida using these documents, exactly as written.
FOR BUYERS AND SELLERS
Your broker:
He or she is a real estate-licensed business intermediary, and a heavily regulated professional. The broker most likely (and you should confirm this) is a member of Business Brokers of Florida (BBF) – the professional organization for specialists in business acquisition and sales procedures, regulations, and ethics. For a short video explaining why this membership is important visit
ASSET PURCHASE AGREEMENT
Forget good ol’ boy handshakes, earnest assurances and oral promises. This form is a time-tested, high-grade suit of armor that works to protect buyers and sellers from expensive surprises, misunderstandings, and possible con artists. It spells out everything – the agreement between seller and buyer, their responsibilities to each other, contingencies that must be met by each for the transaction to be completed, and what happens if a party reneges on its provisions. There are more than 40 built-in protective contingencies, and provisions for either party to add additional contingencies if desired.
LISTING AGREEMENT
This document contains key details about what the Seller is offering: price, estimated value of assets, brokerage fee, financing, any pre-closing requirements, etc. Over many years, this now-standard document has been refined, reviewed by the Business Brokers of Florida, a professional association, as well as by attorneys skilled in real estate and business law.
CONFIDENTIALITY AGREEMENT
Buying a business is very different from buying a house. With residential transactions, the seller is usually thrilled to see ads spelling out the address and details of the house in the newspaper, online, in a box on his lawn and, if possible, via a squadron of skywriters. Not so with the Sale of a Business. The Buyer is going to be privy to the seller’s most sensitive information – including financial operating results and perhaps tax returns. It also is critical to the seller that his employees, customers, and vendors not be aware of the intention to sell until the new owner is ready to operate the business. Consequently, you will always be asked to sign a confidentiality (non-disclosure) agreement confirming that you must not reveal to anyone who is not involved in the transaction that the business is for sale. You also agree not to disclose any of the financial or other information about the business provided during the course of a business acquisition.
FOR SELLERS
Corporate Resolution: Secretary authorizes President or other company official to sign documents.
Owner Benefit Statements: Recasts financials to reflect owner benefits (combination of net profit, depreciation, amortization, interest and any other non-essential expenses that benefit the owner).
Listing Agreement: The formal contract to list and market a business.
Asset List: Assets are valued at current value not original or replacement cost.
Transaction Broker Notice: QBA serves as a transaction broker. We represent the transaction, not the buyer or the seller. Under Florida law this is the default status.
Consent of Spouse to Sell: only for businesses set up as a sole proprietorship.
Exclusion Addendum: Allows a seller to exclude for 30 days any buyers he’s contacted before signing with a broker.
Seller Questionnaire and Disclosure
FOR BUYERS
Non-Disclosure Agreement: Guarantees a seller that the potential buyer will not disclose any of the confidential information provided.
Buyer Personal Profile: Includes financial information and background on buyer.
Asset Purchase Agreement: This is the offer to purchase a business and most often includes a contingency that the buyer does not have to complete the transaction if not satisfied with results of due diligence
Quorum Business Advisors, LLC