Oregon Business Purchase Checklist

Oregon Business Purchase Checklist

Buying or selling a business may be one of the most important financial transactions you’ll ever make. That being the case, it’s important to ensure that you know of, and address, all of the potential legal issues that you should consider when going through the process. This article sets forth an Oregon business purchase checklist (well, multiple checklists, to be exact) that either buyers or sellers of businesses in Oregon may find helpful when entering into a business purchase or sale transaction.

Please keep in mind that some or all of the items below may not be applicable to your transaction, depending on the exact facts of your transaction or if laws may have changed since the time when we wrote this article in early 2021. Even though this list is intended to be as comprehensive as possible, there still may be other issues not listed below that you must address. For example, business sales in heavily-regulated industries may require owners to transfer licenses and get the consent of licensing authorities to do so.

Checklist of Transaction Documents 

First, here’s the list of the potential documents that you may need for your transaction, with some links to defined terms and short explanations. Again, not all of these documents may apply to your transaction, and you may be able to combine some of these documents into a single document. You may also need duplicates of some of the documents. For example, if there are multiple sellers, you may want each of them to sign separate and unique noncompetition agreements.

• Letter of Intent;
• Asset Purchase Agreement or Stock Purchase Agreement;
• Bill of Sale;
• Intellectual Property Assignment Agreement, together with separate assignments for each registered patent, trademark, copyright, and domain name;
• Written Consent;
• Noncompetition Agreement;
• Escrow Agreement;
• Assignment and Assumption Agreement for any assumed liabilities;
• Promissory Note;
• Security Agreement, Pledge Agreement, or Guaranty (if the Promissory Note is secured);
• Termination Agreement (if there are any UCC liens on the assets being sold, in the case of an asset sale) or Release (if there are any other liens, mortgages, pledges, security interests, or other encumbrances on the assets being sold, in the case of an asset sale);
• Employment or Consulting Agreement;
• Lease Assignment, Sublease, or Lease Termination Agreement and new Lease;
• Certificate of Title (if for example, vehicles are being sold);
• Deed (if real estate is part of the transaction);
• IRS Form 8594 (applicable only in asset sales, not stock sales); and
• Oregon Department of Revenue Tax Compliance Certificate (to be completed by the seller in advance of closing) (a business with a BIN may apply for a tax compliance certificate online (click the link for “request tax compliance certification”).

Checklist of Seller Filings at Closing or Post-Closing

Second, here’s the list of filings that may need to be made by the seller at or post-closing:

• Articles of Amendment (for the seller to change its business name in the case of an asset sale where the buyer purchases the business name);
• Confidential Personal Property Return – Form OR-CPPR (ORS 308.290);
• Oregon DOR Business Change in Status Form; and
• Multnomah County DART Letter (to notify the county about the sale of the business’s personal property, to the extent the transaction concerns a business in Multnomah County).

Checklist of Buyer Filings at Closing or Post-Closing

Third, here’s the list of filings that may need to be made by the buyer at or post-closing:

• File an assumed business name application for the name to be used at acquiring business; and
• Report any new hires to the Oregon Department of Justice

Checklist of Seller Closing Obligations

Fourth, here’s the list of items that the seller may have to take care of as part of its closing obligations:

• Deliver all information to the buyer to transfer domain names, web site hosting, utilities, online accounts, and phone and fax numbers;
• Terminate or transfer to the buyer its vendor and supplier accounts;
• Pay any broker fees, to the extent a business broker is involved in the transaction (business brokers often request to be paid around 10% of the sale price); and
• Cancel or transfer any licenses that were needed to operate the business at its premises.

Checklist of Buyer Closing Obligations

Fifth (and finally), here’s the list of items that the buyer may have to take care of as part of its closing obligations:

• Pay any broker fees (although buyers less frequently pay brokers, to the extent a broker is involved in the transaction); and
• Acquire any licenses needed to operate the business at the intended premises.

Remaining Items to Consider

Wait, there’s more?! Not necessarily, and we know that the lists above are long (and maybe overwhelming), but they’re meant to be as comprehensive as possible. That said, there still might be additional issues specific to your transaction that aren’t listed above. That’s where getting the right legal advice helps tremendously. For example, if the transaction is a stock sale, there may be securities laws compliance issues.

The size and scope your transaction will determine how many documents and obligations you’ll need to have drafted and taken care of. We’ve been involved in both smaller business sales where only a handful of documents are needed and in larger business sales where dozens of documents are needed. Be careful if the advice you’re getting is that a single document and a quick payment thereafter to your business broker is all that would be needed.