A business bill of sale is a binding business document used to finalize a change in the title & ownership of any commercial company or business asset.
Whether you are buying or selling a whole business or individual business assets, like equipment, client lists, or trademarks, a bill of sale helps you create a formal record of the fact that proprietary rights have passed from one legal entity or person to another.
Keep in mind that when businesses change hands, all liabilities & contractual obligations are also carried forward from the previous owner to the new one.
Uses & Limitations
A Business BoS is a key document both during and after the sale of a business. It is most commonly used for transactions that do not warrant complex provisions, or for transfers between trusted parties.
As the culminating point of the business deal, the bill protects both parties from potential legal frictions down the line. Here’s how…
- For sellers, it provides documentary proof that they are no longer legally responsible for the business or its assets.
- For buyers, it creates a legal shield protecting them from the seller claiming ownership rights at a later date.
New business owners also need the signed original bill of sale document for tax, registration, auditing, and insurance purposes (but more on that later!)
Why Do You Need One
First, let’s explore some common hypothetical scenarios of when you might need a business bill of sale:
- Selling a Business: To sell any type of business (whether a sole proprietorship, LLC, or corporation)
- Buying a Franchise: To buy a franchise store or branch
- Closure: To sell off individual assets when shutting down operations for good
- Trusted Transfers: To pass ownership rights within the family or friends (say, a relative or a partner)
- Mergers & Acquisitions: To merge with, absorb, or otherwise acquire a new business
- Partner Payout: To transfer shares, rights, or equipment from one business partner to another.
What We Offer
Our team at WordLayout has developed a series of editable Bill of Sale templates to help you buy & sell valuable items of personal or business use.
Whether you are trading vehicles, transferring equipment, procuring a new business, or selling any item of personal property for quick cash, you can use a bill of sale to prove that a transaction took place between the two parties on specific terms in writing.
Key Features
For your ease, this template is:
- Adaptable to the unique legal, technical, or transactional needs of your sale!
- Available in various formats, including PDF, Google Docs, and other cloud-based platforms
- Adjustable in terms of text, checkboxes, and section headings
- Customizable in font style, size, and other formatting preferences
- Editable offline using Microsoft Word
- Printable for completion by hand, if preferred
Purchase Agreement Vs. a Business Bill of Sale – What’s the Difference?
While both are formal documents of legal & commercial value, they are not the same.
For one, they are both signed at different stages of the business deal. A purchase agreement is signed before a sale is finalized, often covering conditional matters. These are specific conditions that need to be fulfilled before the sale can be finalized.
For example, the buyer might need to secure financing, or the seller might need to resolve any outstanding debts. These conditions ensure that both parties are protected and that the sale proceeds smoothly.
On the other hand…
A bill of sale is signed once the parties agree that all terms & conditions have been satisfactorily met and payment has been transferred by the buyer & received by the seller. In that sense, a Bill of Sale confirms that the sale transaction is now complete and ownership has legally transferred from one person or entity to another.
You will often find a reference to the purchase agreement in the bill of sale document. Understanding these nuances can make your sale transaction smoother and legally secure.
Below, I add a quick table showing the key differences between these two documents.
| Bill of Sale | Purchase Agreement | |
| Nature | Receipt of a past sale | Roadmap of a future sale |
| Use Stage | Signed after the sale transaction is complete | Signed at the time of booking or purchase |
| Legal significance | Final and unconditional | Conditional on the sale terms agreed on by both parties |
| Purpose & Use | Transfers legal ownership & title to the buyer | Lays the groundwork for future sale agreements |
Note: Since a bill of sale is a more concise document, it does not include all the details found in the purchase agreement. That said, it is still a legally binding document that provides conclusive proof of the sale/transaction.
What to Include in a Business Bill of Sale
Now, let’s explore each key section in our template
Buyer & seller profiles
To effectively identify both parties to the sale, add their complete profile, including:
- Full legal names (as printed on government-issued IDs)
- Current postal addresses (business or residential)
- Active Email IDs
- Verified phone numbers
Payment details
Specify the following to ensure that each payment is processed and recorded properly:
Payment amount ($)
If you’re using this Bill of Sale outside the U.S., you can easily insert the appropriate currency symbol using the editable file. For non-monetary exchanges (e.g., trade or barter), be sure to describe the value or nature of the consideration provided.
Payment date
In the placeholder provided, enter the exact date when the payment was transferred and/or received. Accurate dating of the document—numerical day, full month name, and two-digit year—is critical. Even a small mistake can delay legal processes or render the Bill of Sale vulnerable to disputes.
Payment method
This template lists four common methods of payment: cash, check, electronic fund transfer (EFT), or credit/debit card. Select the one that applies to your transaction. If the transaction involves a gift or trade, use the alternate version of the template (Version II).
Version II
Version II
Business details
Just like natural persons have IDs, businesses are no different.
As independent legal entities, businesses operating in the U.S must be registered or incorporated in a specific U.S state whose laws & regulations shall govern any legal disputes between the parties down the road.
For each business being sold or transferred, specify the following:
- The entity’s registered legal name, as it appears on the company’s registration documents. This may or may not be the same as the company’s ‘brand’ name
- Where is the company headquartered? Specify the location (city/state) where the business operations are primarily located. This may or may not be the same as where the company is registered.
- Where is the company registered? Identify the particular U.S. where the company is registered. All disputes or disagreements arising between the parties shall fall under this state’s legal jurisdiction.
- State Registration Number: a unique identifier assigned to you when a company is registered. Depending on where your company is registered, this number may also go by Entity Number, Business License Number, or Registration ID.
- Employer Identification Number: Think of EIN like a Social Security Number, but for a business. Also known as a Tax ID, this number is particularly required if the sale of a business involves employees, tax filings, or open accounts with the IRS or state agencies.
Are Taxes Included in the Paid Purchase Price?
Use our template to specify whether the payment amount is inclusive of any applicable government taxes, which may be local, state, or federal. Tax obligations vary by type or scale of businesses, so be sure to research the tax rules in your area.
This step is important as it ensures proper reporting, prevents over-taxation, and protects you during audits. If the business is being transferred as a gift, different tax rules or exemptions may apply.
Sign, Attest & Verify!
To make the Bill of Sale legally binding, both the buyer and the seller must sign and date the document, confirming that they’ve read the terms and conditions, and agree to abide by them.
For added assurance, you can have a witness sign the document too (preferably one on behalf of each party). Our standard PDF version provides space for up to two witnesses to sign the document (Add more using an editable version of the file!).
Notarization (Optional but Recommended)
In some U.S. states, a Business Bill of Sale must be notarized—that is, signed in the presence of a Notary Public. Doing this adds an extra layer of legal security and ensures the agreement is being signed willingly, and not under duress or pressure. It also verifies that there is an adequate understanding of what is being signed.
Check with local laws to determine if your Bill of Sale must be signed by a witness or a Notary Public. For example, in West Virginia, Pennsylvania, and Maryland, residents must have the form notarized.
Supporting Docs
Be sure to clearly name, label, and reference each supporting document to avoid confusion, ensuring smooth exchange of information between the two parties.
Here are some common categories of supporting documents you’ll find attached to a Business Bill of Sale:
- Proof of Identity – ID copies of buyer and seller for verification
- Registration certificate
- Articles of Incorporation
- Completed tax forms for the past 3-4 years
- Non-disclosure forms
- Non-compete agreements
- Intellectual property documents – trademarks, patents, copyrights, or trade secrets.
- Licenses and permits
- Assignment of Leases
- Inventory sheet
- Partnership agreement
- Consent documents (if the business is owned by multiple people)
- Income, profit & expense reports
- Loan or debt disclosure (in case of outstanding financial obligations)
- Client, supplier, and vendor contracts
- Pictures of your business and its assets
As you can see, when you take over a new business, you are not only acquiring new offices, equipment & trade secrets, you are also taking on any past legal liabilities or enduring financial obligations.
To ensure legal clarity between both parties, it’s important to openly discuss and diligently finalise the terms & conditions of the sale (such as legal warranties, non-competes or NDAs, etc.). This helps you avoid legal confusion or costly surprises later on.
What’s Next?
Once signed and verified, both parties must retain a copy of the bill of sale for future reference and record-keeping purposes. Buyers get to keep the original, as proof of legal ownership for tax, registration, insurance and resale purposes.
You Might Also Be Interested In…
- Vehicle Bill of Sale
- Equipment Bill of Sale
- Furniture Bill of Sale
- General Bill of Sale
- As Is Bill of Sale
Wrap Up
Whether you are applying for loans, merging with a bigger company, or insuring your business against future financial losses, you need a bill of sale as one of the primary legal ownership documents proving you have either acquired or given up the legal title to the business.
Download NOW to ensure your next business sale is legally secure, transparent, and smooth!
