Web Hosting Talk : Web Hosting Main Forums : Running a Web Hosting Business : how to secure both parties when selling a hosting business?

[agentbob]

re: http://www.webhostingtalk.com/showth...hreadid=110104

Hi!
Ive finally found two buyers who seem to have the $, and actually being seriuos about buying. One of them pais cash upfront, the other offers a bit more but would like to split out the payment on 6 months, with an 30% upfront payment.

The latter seems to be the best solution, as (1) the offer is better + i dont really need the $ right now, and (2) they seem to be a better home for my clients.

He seems like a great guy, but as we are on two different continents I would need some kind of security.
How would you set this up?
Ive thougth about different models...one could be me owning the domain(s) untill Ive received full payment, that wouldnt help me out in the long run though. As all clients could be moved and out of my control in no time.
Also thought about keeping the 2checkout in my name untill payment?
Is the solution a bank Guarantee?

Anyone else with good ideas?

thanks

Bob!

[eddy2099]

It depends on the dollar value involved. If it is substantial, you might want to get a lawyer and set up an escrow service. The escrow service would protect the interest of both parties. Of course, have him draft a contract with all the legal nitty gritty to protect both parties in the sale and transfers.

[Eric Lim]

I believe that would be quite a big amount of money, from what I read your request. Then escrow would be the best way to go, it secures for both parties from fraud.

Here is the link that explains more about escrow:

https://www.escrow.com/solutions/escrow/process.asp

[Acronym BOY]

For a corporation to change hands internationally, I would suggest both parties having their own lawyers. International business things are not as simple as domestic business things, and changing ownership of a corporation internationally would not be something many people know how to do.

Both lawyers should be reccomending an escorw service as well, if they are saying you don't need one, find new lawyers.

[adult4sale]

i have a business for sale at a similar size, and yes, escrow seems to be the way to go, however - it seems to be for tangible goods mostly right?
Or perhaps domains and other things easier to ship/handle.

I have a few offers from ppl that wants to buy with one upfront payment, and perhaps 4-5 monthly payments covering the full offer.
I would naturally have to hand over the entire business to the buyer before the last payment is done, so what good would an escrow do me?

in case you are wondering, this is what im selling:
http://www.webhostingtalk.com/showth...hreadid=125083

[Jay Suds]

See a lawyer.

If we're talking about $50K+, it's worth it to invest a few dimes into a lawyer to make sure that you are protected. Your lawyer could also likely advise you on any tax implications of the transaction. Also, even when both parties are conducting business in good faith, miscommunication between both sides of the transaction can quickly lead to a failed deal. A clearly written sales contract can prevent such problems.

Adult4Sale: With regard to your question - "so what good would escrow do me" - escrow might not be the best solution in your situation. One possiblity that comes to mind would be to structure the deal so that the buyer needs to put up some assests as collateral - then you can place a lein on those assets, which prevents him from selling them in the event that he fails to pay you. Should that happen, you would then be able to sue him and very likely get the assests, etc. Or you could simply have him find his own damn financing and require that he pay you up front.

[ddent]

No idea if this is applicable in this case, but IIRC banks have some kind of thing used by importers/exporters where they assure the seller that they will be paid and charge the buyer 1 or 2 percent.