What do you need to know if you intend to sell your business? It is essential to have integrated tax and legal advice when selling your business to ensure maximum net profit and minimize contingent liability. Look for a single-source legal, tax, accounting, and business consulting and advisory firm that can help with every aspect of the transaction, from preparation through execution.
To maximize the value of your business, it is essential to have your books and financial records in order, which facilitates the due diligence process for the buyer. It may be necessary to update accounting and internal reporting, as well as income and balance sheets. Tax returns provide a solid view of the actual numbers associated with your company, as well as progression (or regression) across multiple years.
The valuation of your company will be another critical step. While there are multiple methods used to establish the value of a California business, your advisory firm’s legal and accounting staff will work with internal and external valuation experts to ensure that you receive full value for the company you've worked so hard to build.
The structure of the transaction itself is another critical step that requires intensive tax and legal advice when selling your business. Buyers will usually prefer an "asset purchase" to eliminate their exposure to the business's debts and contingent liabilities. The buyer is typically seeking a clean, clear title to each asset and is also able to realize an increase, or "step-up," in the basis associated with assets acquired in this manner.
Most sellers wish to execute a stock purchase agreement to gain tax advantages and achieve a clean break from the company. A seller can transfer ownership of every aspect of the business, including assets, debts, intellectual property, customers, and potential liabilities.
How will you walk away? Will you be required to remain involved in the business to ensure continuity of goodwill? What is the best method to structure payment for the value of your business to minimize the impact of taxation and provide the most significant net benefit based on your short and long-term goals?
A single-source tax, legal, accounting, and business advisory group is able to provide the extensive suite of services required to successfully complete an asset purchase or stock purchase transaction. The value of integrated business, tax, and legal advice when selling your business translates directly to a smoother, more profitable business transaction while minimizing risk and resulting taxation.
