When purchasing a business the seller and buyer focus primarily on the purchase price; however, there are many issues that need to be considered beyond the purchase price.  It is also necessary to examine the ongoing obligations of the business and whether those obligations will be assumed by or assigned to the buyer.  Ongoing obligations can include, but are not limited to: advertising (phonebook and/or internet), utilities, service contracts, and governmental obligations such as the company’s insurance accounts for worker’s compensation and unemployment.

This is an area where attention to detail is paramount.  A lack of attention to the details in the documents, including any required forms or notices that may be completed after the transaction, can inadvertently create an assignment of seller’s ongoing obligations.  This will cause the buyer future headaches, as well as unnecessary accounting and legal fees to remedy the error.  Therefore, sellers and buyers must be clear about their intentions when it comes to the transfer, assignment or assumption of the seller’s ongoing obligations.