1. Certificate from the selling corporation's home state and all
states in which it does business that it is in good standing
2. Representations and warranties from the selling corporation
that:
(i) selling corporation has full authority to operate and sell
business
(ii) sale of the assets does not constitute a breach of the selling
corporation's articles of incorporation and by-laws
(iii) no consent or approval is required from any governmental
agency or other third parties
(iv) any and all real estate holdings, including leases, used
in connection with the business or necessary for the business'
operation are part of the sale
(v) selling corporation owns all rights title and interest to
both the personal property and the real estate being transferred
as part of the sale without any liens, encumbrances, or defects
of title
(vi) any inventory being transferred is free of material defects
in workmanship and is fit for its intended use
(vii) selling corporation owes no back-pay or other unpaid or
unfunded salaries, bonuses, unpaid employee expenses, benefit
plans, or other employee compensation
(viii) any and all union contracts or other labor agreements
are listed in exhibits attached to the contract
(ix) all current and outstanding contracts, obligations, promises,
etc. of the selling corporation that the buyer is assuming (i)
have been disclosed to the buyer; (ii) there are no defaults of
any of these agreements; and (iii) are fully set out in their
entirety in an attached exhibit.
(x) All insurance contracts covering the business are attached
as exhibits to the contract
(xi) there are no permits required for the operation of the
business that are not currently held by the business
(xii) there are no lawsuits pending or threatened, and if there
are, then the all of the documents relating to the lawsuits (except
privileged documents) are attached as an exhibit. Make sure no
the buyer assumes no liability for any such lawsuits, or better
yet, don't buy the business.
(xiii) selling corporation has no subsidiary corporations or
interests in any other businesses.
(xiv) all bank accounts, safe-deposit boxes, and other banking
arrangements of the selling corporation have been disclosed and
are described in an attached exhibit.
(xv) all purchase orders for goods by selling corporation and
all other commitments to purchase goods by selling corporation
are listed in an exhibit attached to the contract, and none of
these orders are in arrears of in default.
(xvi) all unfilled customer purchase orders and all other uncancelled
commitments from customers to buy goods from the selling corporation
are listed in an attached exhibit, and all money already collected
on these orders (advances, earnest money, deposits, etc.) will
be turned over to the buyer on the closing date.
(xvii) all property and equipment necessary for the operation
of the business/production of goods is included in the assets
sold by selling corporation.
(xviii) all intellectual property, including trademarks (applied
for or held), trade secrets, inventions, patents (applied for
or held), and copyrights are included and listed in an exhibit
attached to the contract.
(xix) all material contracts, agreements or commitments (oral
or written) binding or affecting the selling corporation are listed
in an exhibit attached to the contract.
(xx) all material liabilities (besides those found in the balance
sheet and the exhibit listing contracts, agreements, and commitments)
affecting the selling corporation are listed in an exhibit attached
to the contract are listed in an exhibit attached to the contract.
3. Clearance letter from state agencies assuring buyer that all
taxes for sales, unemployment insurance, withholding taxes, etc.
are fully paid
4. Personal guaranty of owner of selling corporation that everything
in contract is true and that he/she is liable for the fulfillment
of the contract as well.
