What do you need to know about selling your business? What is required to sell a business? What are the legal steps to selling a business? How to sell your business?
A checklist for selling a business when there are already prospective buyers must include the following: Ensure that you can identify the scope and limits of the business selling negotiation. Some possible buyers haggle and. Your checklist should also have the procedures that you need to implement. Reviewing the structure, capitalization, organizational documents and general corporate records of the company allows a buyer to ensure your company is in order. Here are some of the documents typically reviewed: 1. Organizational charts 4. Incorporation documents 2. Securities holders 5. Stock option agreements and plans 6. Stockholder and voting agreements 7. Recapitalization or restructuring documents 9. See full list on hatterasgroup.
This process explores historical income tax liabilities and provides an analysis of all tax carryforwards along with their potential benefits. The goal is to verify that your business’s taxes are current in all jurisdictions and that there will be no unexpected tax problems after the sale. Documents reviewed generally include: 1. All federal, state, local, and foreign income, sales, and other tax returns filed within the last five years 2. Correspondence or notice from any foreign, federal, state, or local taxing authority 3. Government audit records 4. Tax sharing and transfer pricing agreements 5. Net operating losses or credit carryforwards 6. Settlement documents with the IRS or other tax authorities 7. The goal of this review is to establish the extent and quality of your company’s technology or intellectual property, including its protection.
This list of documentation usually includes: 1. Licenses and licensing agreements 7. IP litigation and claims 8. Probably one of the most obvious things to review is your company’s material assets and doing so is key to a successful transaction. You must consider the total value of all assets and any debts or liabilities against them. Typically, the following assets are appraised: 1. Your team should also be prepared to hand over all material contracts and commitments tied to your company.
This process is one of the most critical and time-consuming parts of due diligence so preparing the documentation in advance can help keep the sale running smoothly. Generally, a buyer will want to review all of the contracts currently in force at your company, including: 1. Customer and supplier contracts 2. Schedule of accounts receivable and payable 3. Guarantees, loans and credit agreements 4. Agreements of partnership or joint venture 5. Non-compete, most favored nation, and exclusivity agreements 8. Distribution, dealer, sales agency or advertising agreements 10. Franchising agreements 11. After the final closing of the transaction, you will still have a few items to take care of before moving on. In some cases, there may be specific clauses which make the agreement contingent on your delivery of certain assurances, goods, or other obligations meaning the transaction is not finalized until all items have been completed and received in good faith.
More often than not, the sale of your current business will dictate some restrictions on what you choose to do next. Many transactions include a non-compete clause or a covenant not to complete section wherein signing you agree not to create a new entity with competing interests. In the selling a business checklist , the valuation step is crucial to the success or demise of the sales process. After all, you need to be able to present the business in its best light to a potential buyer.
Sell your small business safely and smartly with these expert tips. If you’re considering selling your small business , consider these seven steps to stay on the offensive. Make selling your small business easy with these seven steps. When it comes to buying or selling a business , the entire checklist breaks down into essentially three main parts.
The first part is the location of the business , the negotiation of the material terms, and the drafting of a purchase agreement. The second is the phase is what we call the pre-closing phase. INFORMATION REQUIRED FOR BUSINESS VALUATION Year End Financial Statements, including Tax Returns (up to five years, if available) and your most recent Monthly.
Note: Model and Serial Numbers on each item having a. Get your books in order 1. Checklist for Selling a Business Plan at least months in advance to sell your business. Determine whether you and your expertise are critical to the commercial success of the business. Establish any conditions for the sale of your business regarding your involvement. Do you wish to stay on as. Company owners looking to sell their businesses should first consider undertaking a due diligence investigationof the business or company that they want to sell.
A thoughtful due diligence evaluation of the business prior to the sale process will ensure that the entire process is easily manageable, efficient, and cost-effective for the seller. This is a straightforward document that highlights the fundamental terms of the transaction, such as the type of purchase ( shares or assets ), list of assets to be purchase purchase price, a closing date, and certain conditions of closing.