Documents to Help Smooth Selling of Business for Sale

If you are planning to put your business for sale, the information and documents you need depends upon the industry to which your business belong to. However, there are certain documents that will make it easier to prove yourself as a genuine seller regardless of the industry:

Records/Statements of Past Few Years Tax Returns – Although while putting business for sale, the anticipated performance of business in future matters, still the buyer will want to look at historical tax returns and other financial statements in order to assess the risk associated in buying your business.

List of Assets included (and excluded): The intermediary or broker will need to mention it clearly to the buyers about what exactly are they getting in return of their investment. Having a list of assets that clearly classify the tangible and intangible assets that are included and excluded from the sale will help maintain a transparency in the transaction and eliminate the possibility of any discrepancies during its closing.

Responsibility of Indebtedness of the Business: The buyer’s responsibility regarding the business debt depends on whether the transaction is an asset sale or a stock sale. If the buyer is purchasing only the business assets, all the existing debt obligations will remain the responsibility of the seller. The only thing that will be of interest for the acquirer is to ensure that all other claims to the assets are removed before claiming the transaction. On the other hand if the transaction is a stock sale and the buyer is purchasing equity stake in the company, he will be responsible to understand the full financial picture of the company and have to be a part of it.

Future Plans and Projection Regarding the Business: Although a buyer is more interested in looking at historical financial statement of the business for sale in order to understand the risk involved, the final price of the business is based on what the business is going to achieve in future. You, as a seller understand your business better that anyone else. Therefore, you can prepare a business plan that states the future expectations from your business including all the financial details.

Competitor’s List: Providing the buyer with a list of competitors will give an idea about the entire business market to the seller. It will ensure that proper precautions are taken to maintain confidentiality and also it may act as a starting point to uncover potential acquirers of future.

All this information may or may not be necessarily available to complete the transaction. However, having the maximum possible information with you can help you and your broker to do a better marketing for your business for sale.

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Business2sell provides detailed information on business for sale, businesses for sale, Franchise Business For Sale and more.