- Capital Gains Tax
- Form 8594
- Estimated Taxes
- State Taxes
- Keeping Records
If you are interested in selling your business, you are in the right place.
Selling your business requires careful planning and execution. Before you sell your business there are many issues to consider. These issues can occur during the listing, LOI, purchase agreement, pre-closing, and closing stage of the process.
First, you must get the right counsel to help you on this journey. Private Corporate Counsel business lawyers have the legal and business education, training, and experience to help you. They also have practical experience representing businesses in many sectors, and operating businesses themselves, giving them added insight on what entrepreneurs often tackle when they are considering selling their business. Your Private Corporate Counsel (“PCC”) can help you in many ways, including:
When you have decided that selling your business is the best way to help you make progress towards your aspirations, dreams, and goals, and you have identified and analyzed your potential buyers and have decided that you are going to sell, then it is time to identify the strategic partners you need to help you take the next steps. The right broker can help you list your business for sale and identify and evaluate potential buyers. As Brokers only get paid if the deal closes, it is important to get independent advice about to the value of your business and to have a legal expert help you with the negotiation. At this stage, you should consult with your Private Corporate Counsel on how to identify, evaluate, and choose key external partners, including the following:
Once you have potential buyers and they are preliminarily vetted as qualified buyers, then it is time to begin the negotiation phase. Typically, the first document negotiated is the Letter of Intent (“LOI”). At this stage, it important for you to talk to your Private Corporate Counsel about the key terms of the deal, including:
After you have negotiated a LOI and both parties have signed off, you will have an opportunity to do some preliminary due diligence on the buyer, while the buyer is conducting due diligence on the business. If both sides are satisfied with the initial due diligence, then it is time to begin to negotiate the Purchase Agreement (a Stock Purchase Agreement, if the target is a Corporation, or a Membership Purchase Agreement, if the target is a Limited Liability Company, or an Asset Purchase Agreement if an Asset Sale). Consult with and leverage your Private Corporate Counsel to help you negotiate the following key points to effectively protect your interests and maximize your potential to get a fair deal.
This is a good time to talk to your Private Corporate Counsel about the following:
CAUTION: DO NOT ALLOW A BROKER, SELLER, OR BUYER’S ATTORNEY TO FORCE YOU INTO SIGNING THEIR AGREEMENT.
The due diligence phase of the process is critical. With the help of your Private Corporate Counsel, consider and adress all relevant issues, including:
Organize, Review and Provide Financial Statements
Organize, Review and Provide Real Estate Records
Organize, Review and Provide List of Tangible Assets
Organize, Review and Provide List of Intangible Assets
Organize, Review and Provide Employee Files
Organize, Review and Provide Non-Employee Worker Files
Organize, Review and Provide Vendor Files
Organize, Review and Provide Suppler Files
Organize, Review and Provide Bank Statements
Organize, Review and Provide Business Tax Returns
Organize, Review and Provide Litigation History and Cases
Organize, Review and Provide Organization Records
Organize, Review and Provide Proof of Good Standing
Organize, Review and Provide Auditor’s Letters
Organize, Review and Provide Company’s Budgets and Plans
Organize, Review and Provide Internal Control Procedures
Organize, Review and Provide Other Relevant Records
Ensure Enforcement of Due Diligence Protection Agreements
Address Issues as they Arise
Negotiate Addendums Based on Due Diligence
If your due diligence did not uncover any deal breakers, then it is time to begin the process of preparing to close the deal. At closing it is important to have your Private Corporate Counsel present to ensure that you understand all of the documents being signed, that the documents are executed correctly, and that any unexpected issues get resolved.
Successful entrepreneurs who exit their business recognize that there are always risks to their personal assets.They also recognize that changes in the environment, technology, and politics are unpredictable and can be devastating. They must take steps to protect their assets, by creating a comprehensive plan. The earlier they engage in risk mitigation planning, the more chances they have of creating a plan that will be effective when they need it. Therefore, at the onset, it is a good idea to talk to your Private Corporate Counsel about the following:
Request a consultation to get you started.
While contracts are an effective tool to protect your business against risks and threats from internal workers and external partners, you can enhance this protection by having good policies and procedures in place to guide your workers in their daily tasks and to ensure that everyone complies with the standards you set for the business. This will help create and maintain the positive culture you want and need to improve and grow your business. Therefore, it is a good idea to consult with your Private Corporate Counsel about the following:
Vacation, Sick Leave and Volunteer Leave Policies
Pay and Overtime Policies
Conflict Resolution Policies
Performance Improvement Plan Policies
Grooming and Dress Policies
Social Media Policies
Crisis and Disaster Relief Policies
Download your free guide, Managing Your Business Through a Crisis: 7 Steps to Success, and discover the top recommended ways to prepare your company for the unexpected.
Request your free consultation and we’ll get you started on implementing strategies to protect your business.