Got a Business for Sale in California?
You have worked hard to build a successful business. Whether it is time to move on to another company or you are getting ready to retire, selling your business can set you up for your next venture. You built and ran your business while following California laws for small businesses. When selling your business, it is also critical to comply with California law for a legal sale. Here are five legal things to know before putting your business for sale in California.
1. Assets or Entity
First, decide what to sell. Selling the assets allows buyers to pick and choose how much of the business they want. They can also choose not to assume any business liabilities.
Selling the complete entity may be more advantageous to you as the owner. You sell the assets and all liabilities that are part of the current business valuation.
As prospective buyers begin reviewing your company’s assets and valuation, have these potential buyers sign a confidentiality agreement.
This kind of agreement is a legal document that prevents potential buyers from giving out details about your company during the sale process and other times. The document also prevents them from using your proprietary information for their own purposes or to compete with the company you own.
When information becomes public about the value of your business or other proprietary information, you can lose money on the sale.
When a buyer decides they want to buy your business, negotiations begin. Be sure your legal counsel participates in all negotiation conversations or proposals.
When calculating the final sale price, be sure to follow California usury laws when calculating the interest for the financing of part or all of the sale price. After you and the buyer agree on the sale price and payment terms, have an attorney help you draw up a written agreement to document the price and terms.
4. Sale Agreement
Once you have a negotiated offer for your business, work with an attorney in California to draft the agreement. This document is legally binding and includes all of the details of the sale, including:
- Name of the business
- Buyer’s name
- Assets and everything included in the sale
- Sale price
- Transaction details
- Date of legal transition to new owners
Be sure your business sale agreement follows California law.
5. Close and Follow-up
After finalizing the terms of the sale, it is time to close yourself out of the business and turn it over to the buyer.
California requires filing certain forms with the Secretary of State, Employment Development Department and other public agencies. These forms officially terminate the business entity so that the new owners can proceed with the business under a new entity.
Follow the Law With Your Business For Sale in California
Do not stress with it comes to putting your business for sale in California. Choose legal representation to guide you through the process and make sure the sale proceeds according to the law.
Our legal team knows the law and can help protect your interests when selling a business in California. Contact us to set up a consultation!