It took a lot of effort to build up a business and you might get emotionally attached to them but over time for the sake of doing something new or for the current business you might need to sell them. It is intimidating as well as thrilling to sell a business but the most important thing to prepare before it is the legal documentation and the understanding of the complete procedure. Visit Nash Advisory if you’d like to know more about selling or buying a business.
These are some legal documents that you need to prepare in the most obvious stage before you even think of selling your business.
Evaluation of business and insurance
It is most important to evaluate your business try the help of a professional independent assessor. It will help you to understand what you value. Apart from that you should also consider getting insurance so that you have a cover for your assets and business even if you are facing any lost income for a temporary opening. It will also help in case the business partner dies to cover up future income after paying the spouse for the cover. This little process of getting insurance and business evaluation will give you more confidence about selling the business most profitably.
One should always get prepared with every legal document like financial statement, lease, contracts, returns in other operations that are important for the propertybility of the business. These documents will be helpful to present in front of the potential buyer. Apart from the legal documents, the data of the company should also be up to date and regularly checked in a certain period. It will create transparency about a business between buyer and seller. It will create an appeal towards the buyer.
A letter of intent
As soon as you find a perfect buyer you should start drafting the letter of intent. This one letter will not be legally binding instead it will be an outline of terms and conditions for sale along with the purchase price of assets and liabilities involved in the course of the deal. It would create an intent and expectation for both parties to buy and sell the business.
Purchase agreement and non-compete agreement
As soon as every outline is designed for the selling in the bank of the business you need to make the purchase and non compete agreement. It will determine the final terms of the sale along with the transaction timeline. The purchase agreement will be the legal binding which allows legal action on breaches. The non-compete agreement will restrict sellers from establishing any new business in a geographical area of the same kind for a specific timeline.
These are some important agreements that will help you to go through the business buying and selling process easily if you have an experienced attorney for this particular work. Along with that, willing documents in the closing document are equally important to give the final words of the deal.