Positioning Your Company for Sale

If you’ve decided to sell your business, you’ll need to prepare a Sales Agreement, the core document for selling business assets and/or company stock. It defines everything in the business that you intend to sell – assets, customer lists, intellectual property, and goodwill. After you’ve written up the document, reread it, edit it, and make sure it’s accurate and addresses all purchase terms and components, including:
  • Seller, buyer, and business names
  • Background information
  • Purchase price, assets being sold (including a complete list of inventory), and how those assets will be allocated
  • Financial statements (usually as attachments)
  • Non-compete covenant
  • Terms of agreement and payment terms
  • Seller and buyer representation and warranties
  • Access to business information
  • Date of closing, and how the business will be run in advance of that date
  • Contingencies
  • Fees (including broker fees)
Other issues to address may include:
  • Reducing the company’s dependence on you
  • Upgrading the skills of your successors
  • Proving to the buyer that the business will run profitably without you
  • Implementing a retention plan for key employees and customers, such as placing key players under contract

Game Plan

Consider and address the issues listed above. Then, after you’ve drawn up your sales agreement, be sure to forward it to the company’s attorney for a thorough review. Even better, enlist your attorney’s assistance in drafting the document.
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