Whether you’re nearing retirement, ready to cash out, or seeking to exit a challenging situation, the process requires meticulous planning and execution. Selling a business is a multifaceted journey involving numerous steps to ensure a smooth transition and the best possible outcome. At Bridge Law LLP, we provide more than legal counsel; we connect you with a team of trusted advisors who oversee every aspect of the sale. From preparing your documents to finalizing the transaction, our comprehensive services guide you through each phase with confidence.
How To Sell Your Business?
We recognize that selling a business is not just a financial decision but a significant life event. Our team is dedicated to helping you navigate the intricacies of the sale, offering the support and expertise needed to achieve your objectives. By addressing critical elements such as valuation, tax and legal structuring, and due diligence, we ensure you are well-prepared for each stage of the process. Our goal is to help you secure a profitable and efficient exit, allowing you to focus on your next chapter with peace of mind.
Business Acquisition: Checklist For The Seller
| Checklist Item | Description |
|---|---|
| Be Prepared | Any sale of a business will go much more smoothly if you are proactive in gathering the documents that a buyer would expect to review. |
| Assemble the Right Team | The key parties to bring onboard as soon as possible are going to be knowledgeable legal counsel, a proficient tax advisor, and a reputable financial advisor. The objective of these parties is to help you plan for the most profitable and tax-efficient exit whilst alleviating the stress that comes with any deal and helping preserve as much wealth as possible for yourself and your future. |
| Valuation | Obtain a professional valuation to determine the business’s worth. There are different valuation companies who deal with small, medium and large enterprises. Because Bridge Law is an international law firm, we work with trusted advisors who are able to work with foreign entities acquiring companies in the USA. |
| Tax and Legal Structuring | Ensure that all tax options have been considered to reduce your tax exposure. Choosing whether this is going to be a stock-purchase or asset-purchase will have significant tax and legal implications. |
| Confidentiality Agreement | Ensure a confidentiality agreement (NDA) is in place before sharing sensitive information with potential buyers. |
| Negotiation StrategyProperty | Develop a clear negotiation strategy and set your minimum acceptable terms. |
| Letter of Intent (LOI) | The purpose of the LOI is to summarize the commercial terms you’ve agreed upon with the buyer. Therefore, it is extremely important to have proficient legal counsel help you negotiate terms at this stage. Otherwise, it is extremely difficult to go back and re-negotiate… “measure twice, cut once!” |
| Due Diligence Preparation | Be prepared for the buyer’s due diligence process, including site visits and document reviews. This is where any potential buyer gets a chance to look under their hood, and kick the tires. The time you took to prepare at the beginning of this process will pay dividends now in saving time, avoiding surprises and allow you to stay on track. Expect any potential buyer to want to review the following, amongst other things: 1. Financial Statements 2. Contracts with Vendors 3. Material Client Contracts 4. Intellectual Property (Registered or Unregistered) 5. Employee Records – this is a highly litigious area, so a buyer is going to want to ensure that you have been compliant with labor laws 6. Tax Returns 7. Permits and Licensing |
| Reps and Warranties | Following appropriate due diligence by the buyer, the Reps and Warranties in any purchase agreement are heavily negotiated. If ever there is a problem down the line, the buyer will point to the affirmative statements made by the seller in this section of the agreement, especially around undisclosed liabilities, such as employment issues, threatened lawsuits and IP infringement. |
| Earn Outs | Some buyers will expect a portion of the purchase price to be tied to an earn out requiring the seller to stay on board for a period of time to ensure business continuity. |
| Post-Closing Issues | 1. Create a transition plan to ensure a smooth handover of the business to the new owner. 2. Develop a communication plan for informing employees, customers, and stakeholders about the sale. |
Selling your business is a significant event that demands careful planning and expert guidance. With our comprehensive checklist and dedicated professionals, navigate each stage of the sale confidently. From assembling the right team to managing post-closing issues, we ensure every detail is meticulously handled. Partner with us to achieve a successful business sale, preserving your wealth and ensuring a smooth transition. Contact us today to start your journey toward a well-executed business exit.