Buy or Sell a Business in New Jersey

When business assets are sold outside the ordinary course of business, the buyer must notify the New Jersey Division of Taxation on Form C-9600, with a copy of the signed contract, at least 10 business days before closing. The Division can then require an escrow if the seller owes state taxes. If notice is late or missing, the buyer can be held responsible for the seller’s state tax obligations.

Common approaches look at earnings, such as seller’s discretionary earnings or EBITDA, the value of the assets, and what comparable businesses have sold for. The real estate or lease is part of the picture because it affects the business’s future costs and stability. For a formal valuation, work with your accountant or a valuation professional; I focus on the property and lease side and on positioning the sale.

In an asset sale the buyer purchases specific assets such as equipment, inventory, goodwill and sometimes real estate. In an entity sale the buyer acquires the ownership interests of the company. The choice affects taxes, liabilities and contracts, and in New Jersey a transfer of a controlling interest in an entity that owns Class 4A commercial property can trigger the Controlling Interest Transfer Tax, now paid by the seller. Your attorney and accountant should guide the structure.

Most commercial leases require the landlord’s consent to an assignment, and many include conditions such as the buyer’s financial qualifications or a personal guarantee. Review the assignment clause early, because the landlord’s approval often sets the closing timeline.

It can be transferred, but only through the municipal transfer process. The current licensee needs a Tax Clearance Certificate, the buyer applies to the municipality, and the transfer is approved by municipal resolution, which cannot be made contingent on the sale of real estate or a business.

We describe the opportunity without identifying details at first, share financials only after a buyer signs a confidentiality agreement, and qualify buyers before introductions. Employees, customers and suppliers learn about the sale when you choose.

Typically several years of tax returns and financial statements, a current profit and loss statement, the lease or deed, equipment and inventory lists, licenses and permits, key contracts, and staffing information. Organizing these before you go to market shortens due diligence.

It varies with the size and type of business, buyer financing, landlord consent and any license transfers, so I won’t quote a fixed timeline. The steps are preparation, confidential marketing or search, negotiation and letter of intent, due diligence, contract, required notices and approvals, and closing.

Yes. A business transaction needs your attorney, your accountant and often a lender. I coordinate the real estate, lease and deal logistics with them; I do not provide legal, tax or accounting advice.