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Business Escrows in California
It can be intimidating when, in the course of a business deal or sale, a great sum of money and resources needs to change hands. Everyone wants security when handling their assets, as well as assurances that all parties involved honor the terms of their agreement.
Say two companies are looking to navigate a large financial transaction, perhaps a buyer purchasing assets from a seller. But the buyer wants to make sure payment is not remitted until the transfer of assets take place; simultaneously, the seller does not want to transfer their assets until they receive payment. To solve this impasse, the buyer and seller might hire a business escrow.
A business escrow, either in the form of a qualified attorney or an entity licensed by the California Department of Corporations, helps protect the interests of both buyers and sellers in these situations. They act as a neutral third party to hold assets “in escrow” while the conditions of the previously negotiated deal are met. An escrow agent also assists with other administrative, financial tasks, including ensuring compliance with local regulations.
Our lawyers are ready to serve your escrow needs and are equipped for a wide range of scenarios. We at the Law Offices of Shamieh, Shamieh & Tenieden have offices in both San Francisco and Sacramento, and we serve clients across all fifty states.
How a Business Escrow Operates
In California, you will start with a mutually agreed upon set of terms delineating the roles and obligations of both parties and the escrow holder. This includes specific instructions for how the escrow holder is to receive, handle, and distribute the funds and assets involved in the transaction.
Once an escrow agreement has been signed by all parties, the escrow holder follows the set instructions, while the other parties work to meet their established obligations. Once all terms have been met, the escrow holder releases the funds as prescribed, completing the deal and closing the escrow.
The escrow will conclude the arrangement by distributing a detailed accounting of funds and any other relevant administrative or regulatory documentation. If all has gone well, both parties’ interests will have been protected throughout the course of the deal’s transactions.
While that might sound relatively simple, the truth is that a business escrow often perform a lengthy set of tasks in addition to terms set by the escrow agreement. The complex regulatory and legal procedures involved with any large sale is another significant reason to consider hiring a business escrow lawyer.
Our business escrow attorneys can help manage many elements relating to a business sale or transaction, including:
- Holding of purchase funds from buyer
- Disbursing of funds, including any legally necessary additional third parties
- Preparing and filing standard legal and financial documents relevant to the transaction
- Communicating with county tax collector
- Alerting and acquiring approvals from County, State, and Federal regulators, as necessary
- Complying with lender regulations, including facilitation of loan documentation and funds
- Managing any existing liens, debts, and obligations on assets relevant to the transaction
- Securing any relevant tax clearances
- Securing appropriate signatures on all relevant documentation
- Formally closing escrow when all conditions are met
- Creating and distributing final closing statements and transaction documents to all parties
- Consulting in the event of unanticipated problems
Protect Your Interests
Do not risk a large business transaction or sale without retaining the services of a business escrow. Our San Francisco business escrow lawyers are multilingual, offering legal services in Arabic, English, Spanish, Cantonese, and Portuguese preparing us to serve as your intermediary in a vast array of scenarios.
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