Recently we discussed the bases you should cover in preparation of selling your business. After taking those important steps, which you can read more about here, you can list the business with a broker or another party who can let potential buyers know that you’re selling. Once a potential buyer has expressed serious interest, your attorney can help you start negotiating the terms of the sale.
It’s safe to say that the buyer will negotiate for a price lower than the asking price, so the price you advertise should allow for some leeway during negotiations. If the purchase requires financing, then your attorney can advise you with regard to how much you can legally charge in interest.
As the seller, you’ll have to provide documentation that you legally own the business and have the authority to sell it. Likewise, the buyer should present proof of authorization to purchase.
After you and the buyer have negotiated the terms of the transaction, your attorney can draft a letter of intent, which clarifies the terms. The letter of intent, which is later useful in drafting the purchase agreement, will be signed by you and the buyer.
Next comes due diligence. It’s during this period that the buyer will inspect the various aspects of the business to make sure they match up with what was presented during negotiations. It’s also at this point that you’ll need to disclose your company’s valuation report, financial records, tax records, contracts and other documents related to the structure and operation of the business. Your attorney can help ensure that you make a full and proper disclosure that protects you from future liability.
After due diligence is conducted, the purchase agreement should detail the transaction.
Attorneys at Shulman, Hodges & Bastian LLP guide clients throughout the process of buying or selling a business. You can learn more at our main website.