Chapter 26 Conclusion
This concludes Chapter 26. Below is a brief summary which you can review before you take your chapter quiz.
If real property is involved in the sale, the agent usually treats the sale of the business and sale of the land/building as two separate and concurrent transactions with two concurrent and contingent escrows.
The essential elements of a business opportunity sale:
- A bill of sale, which is the written instrument that passes the title to the personal property.
- Specific financial statements are needed when a business is sold:
- A balance sheet, including assets, liabilities and net worth, which shows the owner or owner's equity.
- TheProfit and Loss Statement.
The Bulk Sales Rules apply when a business is sold that involves inventory.
- A bulk transfer is the transfer of a major portion of a business's inventory that is NOT sold to customers.
- The buyer must give public notice (Notice of Intent to Sell Bulk) 12 business days before the transfer occurs.
Business opportunity terms:
- The goodwill of a business has monetary value, which the law protects. Goodwill is the expectation of continued public patronage.
- Turnover is the number of times the inventory is sold per year.
- Sales and Use Tax is a tax on the sale of personal property.
- Alcoholic Beverage Control Act are the rules that involve the sale of a liquor license.
Government Agencies
A broker should be prepared to inform the purchaser of governmental agencies which the purchaser should contact, such as:
- Internal Revenue Service; State Board of Equalization; State Department of Benefit Payments; State Department of Industrial Relations and County and Municipal Agencies.
