Closing, and your first months as owner

9 min read · Updated

Closing is when the purchase agreement is signed, the money moves and the business becomes yours. Most of what can go wrong at closing is decided earlier — in the structure of the deal, and in what you checked in diligence. This guide covers the decisions that land at the end, and the first months after.

Before closing

  1. Choose an asset purchase or a stock purchase

    When
    In the letter of intent, confirmed in the purchase agreement
    Who decides
    You, the seller and your attorney

    In an asset purchase you buy the business's assets — equipment, inventory, customer lists, goodwill — and leave the company itself with the seller. In a stock purchase you buy the company, with its history. Which is better depends on the tax result for each side and on how much of the company's past you're willing to inherit; that's a conversation for your attorney and accountant.

    If you buy an existing business, the IRS says not to use the former owner's EIN — unless you became the owner of a corporation by acquiring its stock.

    From IRS — Instructions for Form SS-4 (Rev. December 2025), read

  2. Agree how the price is allocated

    When
    In the purchase agreement
    Who decides
    You, the seller and your accountants

    When a group of assets that makes up a business changes hands, both the buyer and the seller generally file Form 8594 with their income tax returns, reporting how the price is allocated across the assets.

    From IRS — Instructions for Form 8594, Asset Acquisition Statement, read

    The allocation affects both sides' taxes, often in opposite directions, so agree it in the purchase agreement rather than leaving each side to report its own.

  3. Clear the seller's sales tax

    When
    Before the money moves
    Who decides
    The state tax agency

    States handle a seller's unpaid sales tax differently. Two official examples:

    In California, the buyer must withhold enough of the purchase price to cover the seller's unpaid sales and use tax until the seller produces a receipt or a certificate showing that no amount is due.

    From California Department of Tax and Fee Administration — Sales and Use Tax Law, section 6811, read

    A California buyer who doesn't withhold becomes personally liable for that tax, to the extent of the purchase price.

    From California Department of Tax and Fee Administration — Sales and Use Tax Law, section 6812, read

    In New York, the buyer must notify the Tax Department of a pending bulk sale, on Form AU-196.10, at least 10 days before paying for or taking possession of any business assets.

    From New York State Department of Taxation and Finance — Bulk sales (TB-ST-70), read

    Ask your attorney, or the tax agency in the state where the business operates, what applies to yours.

  4. Line up the licenses and permits

    When
    Before closing
    Who decides
    The licensing agencies

    You'll need any licenses and permits the business requires — from the current owner, or by applying for them yourself.

    From SBA — Plan your business: buy an existing business or franchise, read

  5. Online business only

    Move the domain and accounts

    When
    At closing
    Who decides
    The seller, and each platform

    After a change of registrant, the registrar must lock the domain against transfer to another registrar for 60 days — unless the registrant opted out before the change was requested.

    From ICANN — Transfer Policy, read

    Each platform — payment processor, marketplace, ad network — has its own rules for changing an account's owner, and some don't allow it at all. Check each one's terms before closing, not after.

Closing day

  1. Sign, fund and take the keys

    When
    The closing date in the purchase agreement
    Who decides
    Your attorney or the escrow agent

    The purchase agreement is signed, the lender and you fund, the seller's liens are paid off and released, and the assets — or the shares — move to you. Before you sign, get the list of what is being paid out of the purchase price and to whom, and check it against what you agreed.

Your first months as owner

  1. Keep the employees, properly

    When
    From the day you close
    Who decides
    You

    When you acquire a business, you can treat its employees as new hires and complete new Forms I-9, or as continuing in employment and keep the previous owner's forms — in which case you accept responsibility for any errors or omissions in them.

    From USCIS — I-9 Central: Mergers and acquisitions, read

    Meet everyone before you change anything. The people who run the business day to day are deciding, in your first weeks, whether to stay.

  2. SBA loan only

    Use the seller's handover

    When
    During the transition period
    Who decides
    You and the seller

    With an SBA loan for the whole business, the seller can work for it only as a consultant, for no more than 24 months in total, including any extensions.

    From SBA — SOP 50 10 8.1, Lender and Development Company Loan Programs (effective Oct 1, 2026), read

    Write down what the seller knows that you don't — suppliers' quirks, customers' habits, the things that break — while they're still there to ask.

  3. Watch the customers, the suppliers and the cash

    When
    Every week, at first
    Who decides
    You

    Call the largest customers and the most important suppliers yourself. Track cash weekly, not monthly. The first months are when a buyer finds out which of the seller's habits kept the business running, and the cash account shows it before anything else does.

This guide is general information about closing a business purchase in the U.S., not legal, tax or financial advice. Each rule above links to the official page it came from and the date we read it.