What other city/county permits, licenses and business related issues should we be concerned with?
Answer - Each city and county, although similar, has its' own licensing and permit requirements. The common issues for operating your business are:
- City Business License
- City and County Health Department Permits
- City and County Services (i.e. garbage, sewer)
- Fictitious Business Name Filing (you will need a copy of this filing for your bank)
- Business Checking Account
Contact the city and county offices where the business is located for special requirements.
What is the prevailing sales tax for the county in which the business will be operating?
Answer - Sales tax will vary depending on the city and county in which you are operating. For a complete list of City and County Sales Tax Rates for California click here.
What advantages or disadvantages are there in how value is allocated to business asset categories?
Answer - Business asset categories have different depreciation schedules for tax purposes. Contact you attorney or CPA for clarification on how this will affect the sale/purchase of the business.
How long does escrow take to complete?
Answer - The average time it takes to complete a Bulk Sale Escrow is 30-45 days. If there is an ABC License transferring with the business the process is lengthened to 60-90 days on average. All business transfers are unique and may not follow the average number of days from start to finish.
What is the cost of escrow?
Answer - The cost of each individual business escrow will vary according to the specifics of the purchase agreement. On average a Buyer and Seller can expect to spend $750.00 each for an average business transfer through escrow.
Do I need to go through escrow? What are the advantages of escrow?
Answer - Not all businesses transfer ownership through a formal escrow. The advantage of hiring a professional escrow agent is the same as hiring a professional attorney or CPA. Unless you are familiar with Bulk Sale Codes, it is recommended that you transfer your business sale or purchase through escrow. Alcoholic Beverage Control (ABC) Licenses and their associated businesses must transfer through escrow.
How can a Buyer be assured they will not be responsible for a Seller’s past debt?
Answer - The process of a formal escrow will assure that the business transfer complies will all requirements of the Bulk Sale Codes. By complying with the code the Buyer is alleviating the issue of ‘successor liability’ to the Sellers creditors.
If the business has an ABC License, will you help with the ABC application?
Answer - Yes, The Mechanics Bank’s, Business Escrow Staff can assist a Buyer and Seller with the complicated forms required for the transfer of an ABC License.
What if the purchase of the business includes the real property it occupies?
Answer - The Mechanics Bank will coordinate the real property portion of your transaction, by opening and ordering preliminary reports with one on the many Title Insurance Companies we have established relationships with. This insures Buyers and Sellers of a smooth concurrent close to both the real estate and business asset transaction.
Do the Buyer and Seller need a Real Estate/Business Broker or an Attorney to draft a buy/sell or purchase agreement?
Answer - It is to the advantage of both buying and selling party to have a formal buy/sell agreement in place. Another advantage of broker or legal representation is providing guidance in negotiating a lease with the building owner or landlord. | 
