At closing: both sides sign the definitive purchase agreement and related documents, the buyer wires the purchase price (less any holdback, escrow, or seller note), the working-capital balance is trued up against the peg, assets or shares legally transfer, and the keys, accounts, and control pass to the buyer. Closing usually happens after diligence is complete and all conditions are met, and can be same-day once documents are signed.
The closing steps
- Sign the definitive agreement and ancillary documents.
- Fund the price, less escrow, adjustments, or a seller note.
- True up working capital against the peg.
- Transfer assets or shares and assign contracts.
- Hand over access, accounts, and begin transition.
What is usually held back
Not all of the price always arrives on closing day. Deals commonly include an escrow holdback (a portion held for a period to cover any post-closing claims), a working-capital adjustment settled shortly after, an earnout paid over time if the business hits targets, and sometimes a seller note the buyer pays down over months or years. Understanding which parts of your proceeds are immediate and which are deferred or at-risk is part of evaluating an offer, not just the headline number.
After closing
After closing, the transition begins: the buyer takes over operations, and the seller often stays available for an agreed handover period to introduce customers and staff and transfer knowledge. A clean pre-close preparation, organized records, disclosed issues, and a transferable business, is what makes closing day a formality rather than a scramble.
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Frequently asked questions
What actually happens on closing day when selling a business?
Both sides sign the definitive purchase agreement, the buyer wires the purchase price less any holdback or adjustments, working capital is trued up against the peg, assets or shares transfer, and control of the business passes to the buyer, often the same day.
Do I get all my money at closing?
Not always. Part of the price may be held in escrow for a period, adjusted for working capital, deferred as an earnout tied to performance, or carried as a seller note paid over time. How much is immediate versus deferred depends on the deal structure.
What is a holdback or escrow at closing?
It is a portion of the purchase price kept in escrow for a set period after closing to cover any post-closing claims, such as breaches of the seller representations. If no valid claims arise, the held funds are released to the seller.
What is a working-capital true-up?
It is the post-closing adjustment that compares the working capital actually delivered against the agreed peg and settles the difference, so the buyer receives a normal level of working capital and the seller is paid for any surplus.
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