Tri-State Business Transactions Guide: What NY, NJ & CT Buyers and Sellers Must Prepare Before Closing

Buying or selling a business in the Tri-State area comes with a few extra steps that most people don’t learn about until they’re deep into a deal - usually when something is already slowing things down.

New York, New Jersey, and Connecticut each have their own requirements around tax filings, state clearances, landlord paperwork, and closing procedures. None of this is complicated when you prepare early… but when it’s handled last minute, it can easily add weeks to a transaction.

This guide breaks down the real-world steps buyers and sellers need to be aware of in NY, NJ, and CT, and how to avoid the delays that derail otherwise good deals.

1. State Tax Filings & Clearances (NY, NJ & CT)

Each state handles tax liability differently - but the goal is the same:
make sure the buyer isn’t inheriting the seller’s outstanding taxes.

New York

NY requires a Bulk Sale Notification (Form AU-196.10).
The state reviews:

  • Sales tax filings

  • Payroll/withholding

  • Corporate returns

  • Any overdue balances

If there’s an issue, NY can require the buyer to hold back part of the purchase price until the seller clears it.

New Jersey

Similar process -  NJ requires a Bulk Sale Notice (Form C-9600).
They’ll look at:

  • Sales tax

  • Income tax

  • Payroll tax

  • Corporate business tax

A “Stop Letter” from NJ puts the closing on pause until the seller resolves the problem.

Connecticut

CT doesn’t have a Bulk Sale filing, but it does enforce Successor Liability.
Most buyers and attorneys will request a DRS Tax Clearance Certificate to prevent inheriting past-due taxes.

DRS checks:

  • Sales & use tax

  • Meals/beverage tax

  • Room occupancy tax

  • Payroll/withholding

  • Corporate income tax

Any missing return - even a quarter with “no sales” - can delay clearance.

Bottom line:
If your books or tax filings aren’t current, it will come out during the sale. Handle it early.

2. UCC Searches & Old Liens (Tri-State Wide)

This is one of the most common closing delays in NY/NJ/CT.

Buyers (and lenders) will run a UCC lien search to see if any of the business assets are tied up in:

  • SBA or EIDL loans

  • Equipment financing

  • Merchant cash advances

  • Bank credit lines

  • Old loans that were paid off but never terminated

If a lien is still showing as active, the closing can’t move forward until a UCC-3 termination is filed - and banks aren’t known for moving fast.

Sellers should always:

  • Run their own UCC search before listing

  • Identify open liens

  • Request terminations immediately

Handling this ahead of time saves stress later.

3. Landlord Requirements & COIs (Especially in NY & NJ)

Tri-State landlords are strict, especially in New York and New Jersey.
During a business sale, they often want:

  • A Certificate of Insurance naming them as additional insured

  • Proof of workers comp

  • Updated liability limits

  • Buyer’s résumé

  • Buyer’s financials

  • A business plan or summary

Connecticut landlords are usually quicker but still require COIs and updated certificates.

Most common delay:
Insurance agents taking 1–3 days to issue a COI because they weren’t looped in early.

Tip:
Tell your insurance broker the moment an LOI is signed. It saves time.

4. Sales Tax Records & Payroll Reporting (All States)

Buyers (and lenders) usually request:

  • 3–4 years of sales tax returns

  • Proof of payments

  • Payroll and withholding records

  • Corporate tax filings

  • Any state notices or audits

If anything is missing, inconsistent, or filed late, expect follow-up questions.

Restaurants, retail, and service businesses with cash components get the most scrutiny.

5. What Tri-State Buyers & Sellers Should Prepare (Practical Checklist)

Before Listing or Before Making an Offer

  • Run a UCC search

  • Gather sales tax filings + proof of payment

  • Confirm payroll & withholding are current

  • Review your lease insurance requirements

  • Loop in your accountant early

During LOI

  • Provide financials, returns, payroll, and tax filings

  • Identify any liens that need termination

  • Prepare the buyer’s landlord packet (if you’re the buyer)

  • Tell your insurance agent a sale is happening

During Diligence

  • Respond quickly to document requests

  • Keep communication weekly and consistent

Before Closing

  • Confirm tax clearance in NY/NJ/CT

  • File NY/NJ Bulk Sale forms early or start CT DRS clearance early

  • Make sure all UCC terminations are complete

  • Provide updated COIs

  • Resolve any remaining state filings

Final Thoughts

Whether you’re buying or selling a business in the Tri-State area, preparation is everything.
NY, NJ, and CT each have their own quirks - but none of them need to slow your deal down if you stay ahead of the filings, insurance requirements, UCC cleanups, and tax clearances.

The deals that close smoothly are the ones where everyone knows what’s coming next.

If you want help preparing for a sale or understanding what you’ll need as a buyer, I’m happy to walk you through it based on your specific state and industry.

Eric I. Mendelsohn- Business Broker