The Bulk Sale Escrow Process
The sale of a business is different from the sale of real estate because a business is defined as personal property. The Bulk Sale Code contained in the Uniform Commercial Code of California governs the bulk sale business escrow process.
The Bulk Sale Code requires the publication of a required Notice to Creditors for a mandatory minimum publication period. The close of escrow usually takes place on the day the Buyer takes possession.
The escrow instructions and all necessary documents, including the Notice to Creditors, are all prepared at the beginning of the bulk sale business escrow. These documents must be signed by all parties and delivered into escrow along with the escrow fees and funds for payment of up front expenses for publication and filing fees, etc., in order to enable the recording and publication of Notice to Creditors.
The uniform Commercial Code of California requires that all monies in a bulk sale, including sales price and inventory of stock in trade, must pass through escrow and requires that no funds are released to the seller prior to the close of escrow. The close of escrow on a Bulk Transfer Escrow is usually the date Buyer takes possession.
- Provide terms of the sale and other required information to the escrow officer
- Escrow officer prepares escrow instructions and documents for signature
- Executed escrow instructions and documents are returned to escrow, including the buyer deposit
- Publish and file Notice to Creditors and other applicable documents
- Escrow officer requests releases/clearances from State Agencies
- Escrow officer requests State and County Lien Searches
- Clearances and/or Claims received and acknowledged
- Escrow officer prepares final amendment and requests final deposit of documents and funds
- Claims period ends
- If a liquor license is involved, escrow cannot close or release funds until the license is transferred by A.B.C. before closing.
- Business sale escrow closes
This represents a general overview of the bulk sale escrow process. Each business sale escrow is unique.
Allison-McCloskey Escrow Company handles escrows which involve liquor license only transfers- either from person to person and/or premises to premises. Additionally, we facilitate liquor license transfers that occur in conjunction with a Bulk Sale Escrow.