DOCUMENTATION CHECKLIST
- Description of Assets- describe the subject matter of sale, and allocates price to subject matter [equipment,. supplies, records, goodwill, covenant not to compete.
- Terms of Consideration- cash payment and/or financing.
- Other Items- right to use seller’s name, telephone listing, referral sources.
- Covenant not to Compete- term and boundary [valid under Business and Professions Code Section 16601]
- Accounts Receivable- who gets them, mechanics for collection-key clause- insure buyer’s right to retain all income for his/her own production after the sale closes.
- Retreatment- Key clause- automatic mechanism for handling re-work of seller’s work so buyer does not lose money and seller does not end up in malpractice suit.
- Letters of Announcement and Introduction
- Seller’s Warranties Regarding Ownership Debts- key clause- provide for indemnification if debts surface after closing.
- Buyer’s Warranties
- Insurance- key clause- seller to retain insured at least three [3] years after sale closes-same for buyer.
- Custodian of Records- key clause- buyer retains all of seller’s records. When inactive may send to seller or destroy; buyer should not agree to hold seller’s records forever.
- Hold Harmless/Indemnification- key clause- seller responsible for seller’s treatment before closing, buy responsible for buyer’s treatment after closing; with cross-indemnification.
- Closing Date and Escrow
- Contingencies- key clause- state what deal is contingent on, i.e. bank loan, assignment of lease, passage of state boards, etc.
- Arbitration / Attorney’s fees
- Bill of Sale, Promissory Note, Security Agreement, Consent of Spouses.
Reprinted with permission of the Goldman law Firm, Two Rincon Center, 121 Spear Street, Suite 212, San Francisco, Ca. 94105 [415] 357-2940 Fax [415] 357-2949 1996