Buying an Operating Business – Step 3.  Closing Day is upon us! And what happens after that?

November 6, 2025  |  Carole Clark Isakson

A large portion of my day is spent working on transactions for clients who are either buying a business or selling a business. Having walked so many people through this process over the last three decades I have a pretty well-developed system for explaining how transactions typically work, what issues to watch for, and best practices. This blog is the THIRD of three addressing the sales and acquisition process for private transactions. For simplicity, I will address the process from the buyer’s perspective. I will also assume that the companies involved are corporations, although of course they could just as easily be limited liability companies, in which case the information will be the same, albeit with different terms.

While the topics covered in this blog and the statements made apply in the majority of transactions, every transaction is different. Do not rely on this blog when undertaking a transaction; that should be done in connection with legal, tax and other professionals.

Here is a reminder of the typical process:

1. Execution of Non-Disclosure Agreement and preliminary limited information sharing.
2. Execution of a Letter of Intent, which triggers much more extensive information sharing and the start of the formal due diligence process.
3. Negotiation of the Purchase Agreement terms, and completion of all due diligence.
4. Closing!
5. Post closing matters.

Your purchase agreement is signed (which can happen before or at Closing). The closing is happening. How does that work? What if there are questions after you close? Ironically, in most business transactions the closing itself is electronic, although in some cases as a formality the parties will get on a phone call and agree that all of the documents are signed and all the conditions are met. Once the buyer says it has everything it will authorize the wire to be released. As you can imagine, however, with as many documents as are typically needed to close the transaction, we don’t wait until the moment of closing to start signing and exchanging. The closing process will typically start a day or two before the actual closing. Each party’s attorney will work with its client to make sure that all documents are signed, and the signature pages will be exchanged by the attorneys in escrow – i.e. as the buyer’s attorney I will be sent all of the seller’s signature pages to be held until the seller’s attorney lets me know they can be released. By receiving them early, I am able to tell the buyer and other third parties (lender for instance) that I have the signature pages in my possession.

So, what gets signed in a typical deal?

The purchase agreement may already be signed, or it is signed at closing. What else is signed? The core group of closing documents looks like this:

1. The stock power (assigning the stock certificates) or a bill of sale assigning the assets
2. Titles to titled assets
3. IP assignments for intellectual property
4. Assignment and assumption agreements for contracts that the buyer will obtain
5. Real estate leases and related documents
6. Employment and consulting agreements (for instance, with the prior owner with respect to post-closing consulting)
7. Escrow agreements (where some of the purchase price is held back until the final purchase price is calculated, and another escrow to be held for some period of time to ensure seller compliance)
8. Financing documents in the case of lender financing, or seller financing
9. Non-competition (and non-solicitation) agreements with the prior owners
10. Incumbency and closing certificates
11. Purchase price allocations (although that is hopefully in your PA)

As part of the closing, and before it will be final, any third-party consents must also be obtained.

So what happens if things go “wrong” after closing? The simple answer is that you look to the purchase agreement and the other documents; a well drafted purchase agreement will cover the “what ifs”. The buyer may have agreed to accept some risk up to a certain level, and an escrow agreement may govern funds that have been held back to cover certain “what ifs”. While it is unusual to have major issues post closing, minor issues are generally easily addressed by the agreements that are already in place. Your attorneys will be there to assist in matters, whether they arise pre-closing or post-closing.