using a lawyer when you sell your business

If you use a lawyer to help sell your business, they will:

• Make sure contracts with customers, suppliers and employees are up to date and compliant,
• Create a non-disclosure agreement
• Create warranties
• Draft and negotiate a sales agreement that gets you the best deal.

Full Answer

How do you protect yourself when selling a business?

Understand exactly what's being sold. ... Consider the value of intangible assets. ... Involve your accounting and legal teams. ... Seek out industry-specific lawyers. ... Retain a maximum equity stake leading up to the sale. ... Make sure you fully own the intellectual property. ... Decide the basic terms of the deal yourself.

What should you not do when selling a business?

7 Mistakes to Avoid When Selling Your BusinessNot Being Prepared. ... Not Understanding Where A Company's True Value Is. ... Not Taking Advantage of Professional Help. ... Not Being Honest or Misrepresenting a Business in the Selling Process. ... Pricing Incorrectly When Selling a Business. ... Not Pre-Qualifying Buyers.More items...•

Who should I talk to about selling my business?

Your business advisory team may consist of: a business broker/investment banker, valuation expert, accountant, tax advisor, and transaction/M&A attorney. On the personal side, your financial advisor, estate planning attorney, and CPA/tax advisor should be involved throughout the process.

What to do if you sell your company?

Minimize your taxes on the saleStructure the transaction beneficially. ... Seek capital gains treatment. ... Take a loss on other investments. ... Consider tax-free investments. ... Remember charitable donations. ... Consider gifts. ... Max out your IRA or other retirement plan contributions. ... Prepay your state and/or local taxes.More items...

Can I walk away from my business?

You can simply close the business, sell its assets, and pay your creditors on a pro rata basis until the business's cash is exhausted. You won't be personally liable for the balance of the debts your corporation or LLC can't pay.

How do you negotiate when selling a business?

Negotiate Like a Pro -- 7 Techniques When Selling Your CompanyRemember, price is not everything. ... Have a walk-away number. ... Make strategic concessions. ... Know whom you're negotiating with. ... Do the homework. ... Consider making the first offer. ... Realize it's OK to walk away.

How do I shut down a business?

Close your businessDecide to close. Sole proprietors can decide on their own, but any type of partnership requires the co-owners to agree. ... File dissolution documents. ... Cancel registrations, permits, licenses, and business names. ... Comply with employment and labor laws. ... Resolve financial obligations. ... Maintain records.

How do I sell my small business owner?

How to Sell to Small BusinessesHighlight hidden costs. Small businesses tend to be very “literal” in the way they look at cash and their bottom line. ... Make it an “ROI” conversation. ... Remember it's about underpriced attention, not “social media” ... Host in-person events using Facebook, Instagram, or LinkedIn ads.

How do you determine the sale price of a business?

There are a number of ways to determine the market value of your business.Tally the value of assets. Add up the value of everything the business owns, including all equipment and inventory. ... Base it on revenue. ... Use earnings multiples. ... Do a discounted cash-flow analysis. ... Go beyond financial formulas.

What tax do I pay if I sell my business?

Capital Gains Tax when selling a business To work out your tax liabilities, you need to understand Capital Gains Tax. Capital Gains Tax is the tax applied on the profits made from selling your business, not the total amount received from the sale.

What happens to cash in bank when a business is sold?

In conclusion, 99% of the time, the cash in the bank is for the seller to keep. And that should be considered by sellers as part of their proceeds of sale when planning on how much the sellers will net after the closing costs and taxes that affect the sale.

What happens to inventory when closing a business?

Inventory Liquidation Businesses that use liquidation as an exit strategy typically sell their inventory in going-out-of-business sales to the public. They may also sell a portion of their inventory or assets at a public auction.

What does a lawyer do when selling a business?

When selling a business, a lawyer often works with other professionals to ascertain the value of the company, what assets and liabilities exist and how best to ensure this information appears in a positive manner to the potential buyer. This means explaining the structure, the layout, the files and figures and how employees ...

Why do lawyers work for businesses?

When buying a business, the lawyer may have more work than when selling. This is to ensure that due diligence is performed and all factors are considered when purchasing the new company.

What is a lawyer contract?

A lawyer drafts contracts that the buyer or seller needs to sign with the other owner. These should have certain conditions to ensure the arrangement is beneficial, and when necessary, advantageous for both parties. When a company is accruing revenue, it is often necessary to have an accountant to keep the book up to date.

What does a business lawyer do?

The lawyer may need to contact state officials, file documents with certain agencies and obtain licenses when buying a new company. It is his or her job to protect the owner from litigation, liability and legal injury when buying or selling a company. With a business lawyer, it is possible to achieve success. Provided by HG.org.

What is due diligence in business?

The employees, agreements in place, clients, business associations and numerous other processes need to be checked out . A lawyer drafts contracts that the buyer or seller needs to sign with the other owner.

Why is it important to have an accountant?

A lawyer is needed for interactions, contracts, documentation and various transactions, but an accountant is necessary for the financial data, numbers and funds either being obtained or when buying a new business. ...