Business escrows are utilized for both asset and stock sale/purchase transactions to protect the buyer, seller, and any lender. It is the policy of Pacific Business Advisors to require the services of a business escrow for all transactions in order to make certain that all parties are protected.

While every transaction is different, business escrow holders generally perform the following important functions:

• Preparing written escrow instructions setting forth the duties of the escrow holder and the terms of the agreement between the buyer and seller;
• Complying with the Bulk Sale laws, if applicable;
• Obtaining and holding any funds from the buyer and lender, if applicable;
• Notifying and obtaining any required clearances from government agencies;
• Requesting any pay-off demands from lien holders, if applicable;
• Prorating any interest, taxes, and rents, if applicable;
• If required, preparing and filling any fictitious business name statements;
• Preparing estimated closing statements for the buyer, seller, and lender, if applicable;
• Securing tax clearances;
• Recording any UCC -1 forms, UCC-3 forms and deeds of trust, as required; and
• Closing the escrow when all instructions of the parties have been satisfied, including the distribution of funds and documents.

There are times when parties to a sale/purchase agreement want to waive the use of a business escrow. We strongly encourage the use of a business escrow holder for every transaction even if the dollar amount is small.

Pacific-Realtors.net
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