Legal Question in Business Law in California

When buying a business that has 20 years of business bank account records, is it legal for the seller to keep the business account in their name, or does the seller have to sign over the business account to me with the financial institution? so that I may use the financial statements for the purpose of showing continuity of finances to obtain a loan?


Asked on 6/07/17, 11:30 am

1 Answer from Attorneys
Mark Saltzman, MBA, JD Law Offices of Mark E. Saltzman

There is no law, forcing the seller to sign over business accounts, but you can put that into the purchase agreement. Make sure that your purchase agreement accurately indicates what you are buying. Are you buying the intellectual property (e.g. patents and copyrights and the company name)? Are you buying the accounts receivable? Are you buying a business entity, such as a corporation or limited liability company? Are you assuming the company's liabilities?

I suggest that you have the purchase agreement reviewed by an experienced business attorney. When I prepare such agreements, I follow the general rule that one does not prepare a contract for what is likely to happen. One prepares a contract for what happens in the event something goes wrong.

Good luck to you.

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Answered on 6/07/17, 11:41 am


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