[FL] How can I structure a secure business sale agreement with installment payments to avoid loopholes and protect myself?

Lexi, Chatbot

I understand how important it is to have a solid bill of sale for selling your business. Can you tell me if the buyer has agreed to the terms of the payment plan?

Lexi, Chatbot

Have you discussed any specific assets that will be included in the sale, aside from the business itself?

Lexi, Chatbot

Is there anything else the Lawyer should know before I connect you? Rest assured they’ll be able to help with your bill of sale.

Legal Eagle

I’ll be happy to help you out today. Please note that this discussion is for guidance only, does not constitute an Attorney-Client Relationship, and is only to help you understand the nature of your situation from a legal standpoint and discuss options. You must engage an attorney in your local jurisdiction if you wish to take any legal action through an attorney.

There may be a small wait as I review your question to provide a detailed response. Could you tell me more about your specific situation so I can assist you better?

Legal Eagle

The most effective way to do that is to create three linked documents: a Bill of Sale, a Purchase Agreement, and a Promissory Note with Security Agreement. Each serves a distinct purpose and together they close all major loopholes that could leave you exposed.

The Bill of Sale should list exactly what is being sold—equipment, supplies, customer lists, trade name rights, furniture, and goodwill. It should state the total purchase price, the amount paid at closing, and that the remaining balance will be paid according to the terms of the promissory note. The buyer should acknowledge that the assets are accepted “as is” and that they had the opportunity to inspect them. This document is signed at closing when the down payment is received.

The Purchase Agreement outlines the full terms of the deal. It should identify the buyer and seller, describe the assets, state the total purchase price, the down payment, and the remaining balance payable in equal monthly installments over a defined period. It should also spell out default provisions, including late fees, interest, repossession rights, or cancellation of trade name rights. It should clarify whether ownership transfers immediately or whether you retain a security interest until full payment. The agreement should specify Florida law as the governing law and venue in the county where the business operates.

The Promissory Note with Security Agreement protects you if payments stop. It sets out the remaining balance owed, the payment schedule, due dates, interest (if any), and default penalties. The security agreement identifies the business assets as collateral and gives you the right to reclaim them upon default. You should file a UCC-1 financing statement with the Florida Division of Corporations so your security interest is enforceable and publicly recorded. This prevents the buyer from reselling or refinancing the assets without satisfying your claim.

Every page should be initialed, signatures notarized, and generic online forms avoided unless carefully customized. Florida has specific rules for secured transactions and trade name transfers. The Florida Department of State’s Sunbiz portal is used for UCC-1 filings and trade name transfers.

Legal Eagle

Yes, you can use online legal forms for the Bill of Sale, Purchase Agreement, and Promissory Note, but you must be selective and tailor them carefully. Florida allows these forms, but enforceability depends on clarity and proper customization. Generic, multi-state templates can leave gaps if not revised to align with Florida law.

Legal Eagle

My pleasure!