When selling a business, there are basic documents that you need to prepare. If you plan to sell your business within the next few years, it is wise to organize and prepare these essential documents in advance. In my experience, having well-prepared documents without errors can help you sell your business faster and at a better price.
Let's take a look together.
Business Formation Documents If you are selling the entire business including IP, not just conducting an asset sale of items and inventory within the business, buyers will naturally request this information. They will want to see how and with whom the business is structured.
Tax Returns (3 Years) While this is less crucial for businesses selling for under $100K, for businesses selling at a higher price, it is advisable to prepare at least three years' worth of tax returns. It is advantageous if the income reflected in these tax returns shows an upward trend.
Lease Contract If the current business location is rented, you will also need the lease contract with the landlord. This shows how much time remains on the lease, the options available, and the schedule for any price increases.
Owned Equipment List This is a list of fixtures, equipment, and machinery currently in the business that will be transferred to the buyer upon sale. Include the depreciated value of each piece of equipment so the buyer can understand the current value of the equipment they will acquire with the business.
Leased Equipment List and Lease Contracts This is a list of equipment/machinery that is leased. Include the monthly payment amounts and the end dates of the leases. Prepare the lease contracts for this equipment.
Business Licenses, Certifications, Registrations These are obviously necessary. There are very few people who would buy a business operating illegally.
Inventory List If you are selling your inventory along with the business, you should organize a list of this inventory and its current value. This can also be a significant selling point for buyers.
These are the basic documents you should organize.
If you have any additional questions, feel free to contact me anytime.
Thank you.
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