Business Acquisition Closing Checklist

Phase 1: LOI through due diligence (items 1–15)

1. Execute a signed letter of intent (LOI) with purchase price, deposit amount, exclusivity period, and contingency list. 2. Open an escrow account with a licensed escrow company or attorney familiar with business acquisitions. 3. Obtain the seller's three most recent years of federal tax returns (Form 1120, 1120S, or Schedule C). 4. Obtain three years of internally prepared profit-and-loss statements and reconcile to tax returns. 5. Obtain the seller's most recent 12 months of bank statements for all business accounts. 6. Request the full accounts receivable aging report and accounts payable aging report. 7. Obtain a complete list of all equipment, fixtures, vehicles, and inventory included in the sale. 8. Review all existing customer contracts, supplier agreements, and service agreements for assignment clauses. 9. Verify that the business name, trademarks, domain names, and social media accounts are properly owned or licensed. 10. Obtain a list of all employees with salaries, titles, and employment agreements. 11. Review the commercial lease: term remaining, rent escalation clauses, assignment clause, personal guarantee requirements. 12. Verify all business licenses and permits required to operate - at federal, state, and local levels. 13. Obtain any existing franchise agreement, FDD, and disclosure of outstanding franchisee disputes. 14. Verify the seller's UCC lien search results in the business's state of formation and principal state of operation. 15. Hire a CPA to perform quality-of-earnings analysis if purchase price exceeds $500,000.

Phase 2: Financing and legal (items 16–28)

16. Submit complete SBA 7(a) or conventional loan application with all required documentation. 17. Receive lender term sheet and verify loan amount, rate, term, and required equity injection. 18. Order business appraisal if required by lender (typically required for SBA loans over $250,000). 19. Negotiate and sign the Asset Purchase Agreement (or Stock Purchase Agreement if buying entity shares). 20. Verify that the purchase agreement specifies which liabilities transfer and which remain with the seller. 21. Negotiate seller non-compete agreement: scope, duration (typically 2–5 years), and geographic restriction. 22. If applicable, negotiate a seller transition consulting agreement: duration, compensation, and deliverables. 23. Obtain landlord consent to lease assignment or negotiate a new lease before closing. 24. File or review bulk sale notice requirements in states that require them (California, for example, requires 12 business days advance notice to CDTFA). 25. Verify that all existing federal, state, and local tax filings are current and no outstanding tax liens exist. 26. Obtain evidence of workers' compensation insurance (and verify the policy is transferable or replaceable at close). 27. Obtain key-person life insurance commitment if required by SBA lender. 28. Review SBA loan closing checklist and confirm all lender conditions precedent are satisfied.

Phase 3: Close and post-close (items 29–40)

29. Conduct a final walk-through of the physical premises 24–48 hours before closing. 30. Verify physical inventory count matches the inventory schedule in the purchase agreement. 31. Confirm utilities, accounts, and service providers have transfer orders in place for closing day. 32. Fund equity injection to escrow per SBA or lender requirements. 33. Execute all closing documents: bill of sale, assignment agreements, lease assignment, and non-compete. 34. Record any UCC financing statements required by the lender. 35. Notify all key suppliers and vendors of ownership change immediately post-close. 36. Notify employees of ownership change per employment law requirements in your state. 37. Change all bank account signatories and update business banking immediately post-close. 38. File fictitious business name (DBA) transfer or new registration if operating under a trade name. 39. Update any professional licenses, contractor licenses, or regulated industry licenses under new ownership. 40. Schedule a 30-day post-close meeting with the seller to conduct knowledge transfer per transition agreement.

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