Maximize Your Business Sale Price: Gathering These Documents In Advance…

You’ve decided to sell your business and you’re (hopefully) going to speak with your attorney and accountant about it. The following, non-exhaustive list sets forth the documents that you should review with your accountant and attorney before the selling process (e.g. before you start looking for a buyer) starts.  And if you’re buying a business, these are must have’s for any buyer’s due diligence.

paperwork

  1. Financial Statements.  Balance sheets, profit and loss statements, pro formas and cash flow projections.  These help your advisory team help you prepare the business for sale.  They will also help in affixing a value and preparing for your next move.
  2. Tax Returns.  Along with all schedules, tax returns for the preceding three years, along with copies of any audit issues.
  3. Organization Chart.  Hopefully, you have had the opportunity to plan some succession.  An organization chart lists all your employees and their positions, and facilitates discussions about possible purchasers, and those who may remain after a sale…and those who may not.
  4. Real Estate Owned or Leased.  A list of all property owned, leased or controlled by your company, along with a copy of any leases or essential mortgage data.
  5. Members/Partners/Shareholders.  A list of all individuals with ownership in the business.
  6. Governing Ownership Agreements.   Businesses are typically governed by an agreement of some sort (partnership agreement, operating agreement, By-Laws, Shareholder Agreements, etc.).  Often, they will control the method and process to approve your sale.  In their absence, state law will control.
  7. Corporate Documents.  These include annual meeting minutes, formation filings, special meeting minutes and your share or membership interest transfer ledger.  This shows who owns how much of your company.
  8. Asset List.
  9. List of all Liabilities, By Creditor.  This includes copies of all equipment and/or vehicle leases, notes and/or UCC Financing Statements, and any owner personal guarantees.
  10. Accounts and Signatories.  A list of the  accounts your company maintains, and a list of the people who can draw on them.
  11. Permits and Registrations.  
  12. Other Agreements & Documents.
      • Licenses, Patents and Trade or Service Marks
      • Key Vendor or Customer Contracts
      • Employee Agreements
      • Insurance Policies.  This includes any life insurance on essential personnel or owner
      • List of Pending Lawsuits
      • Any Other Current Agreements
About Chris McGrath

I’m a Carmel, Indiana business attorney providing business counsel, commercial litigation and mediation services based on over 20 years of experience. My firm is founded on a principle of supporting others’ advancement and achievement, and my core values are service, passion, faith & loyalty.Chris McGrath’s Google+ Profile