You have worked to build up your business and to become successful. Now you have decided to sell your business. What steps are necessary for a successful and smooth sale to the new owner?
Preparing to Sell a Business
A business may be sold by listing the company for sale with a business broker, selling to an existing employee of the business or based on an offer from a prospective purchaser. It is crucial to know what is being sold and the purchase price the owner is willing to accept. Additionally, the owner should make sure that the business documents and records are in good order for a prospective purchaser to review.
Type of Sale
A business owner must decide whether to sell the business entity (stock in a corporation or membership interest in a limited liability company) or just the business assets. The type of sale can affect future liability and tax consequences so it is wise to get advice from an attorney to help evaluate the type of sale as well as prepare the documents for the transaction.
It is important to have a solid information about the value of the business. There are ways to get a ballpark estimate of the business value by comparing the sales prices for other similar businesses. However, at some point the business may need to be valued by an expert in business valuations. These valuations could be performed by a business broker, business appraiser or an accountant. The value of the company is a critical piece of information used when selling a business.
Company Records, Documents and Agreements
Selling a business, it is important to make sure that the company records, documents and agreements are in order to provide to a prospective purchaser. If business information is or confidential, the seller should consider using a Non-Disclosure Agreement (“NDA”) for all prospective purchasers and their brokers or agents. An NDA will assist the business in keeping its sensitive and confidential information private if the prospective purchaser does not buy the business. Information about the company should not be released without having a sign NDA.
Hire an Attorney to Help with the Sale of a Business
The circumstances of each particular client and sale are carefully considered for each transaction. It is important to have legal counsel when selling a business to make sure that the interests of the business owners are protected. We are skilled in helping business owners take the steps to have a successful and smooth sale of their business. Contact us at (925) 463-9000 or send an email.
Lisa Wills of the Law Offices of Lisa D. Wills is an experienced business law attorney in Pleasanton, California helping business owners navigate through the sale of their business. For expert legal support for your business, contact Lisa Wills, Law Offices of Lisa D. Wills at (925) 463-9000 or send an email.