Q: If I sell my business on contract & the buyer does not pay - can I foreclose on the buyer's house or other collateral?
Wondering if a business sale contract gives similar protection benefits to something like a mechanic's lien - where the debt can be secured with property or other collateral.
The sale of a business can be collateralized just like other transactions. As long as real estate securing the transaction is not a homestead, real estate can secure the transaction. This is commonly done with a deed of trust.
Perfecting a security interest has different requirements depending on the nature of the collateral involved.
The sale of a business, whether it be a stock or asset transaction, is a fairly complex transaction that only a fool would do without an attorney to protect his or her interests. There are many legal considerations that even experienced business people can easily overlook with significant far-reaching ramifications.
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