Selling Your Business
Selling your business should be aproached with all the due care and attention of any major transaction.
The reality is that successfully selling a business requires preparation BEFORE you start the process of finding a buyer, even if that buyer may be associated with your business currently as an associate or an employee.
Determine exactly what you are selling and what is included with the business.
Ensure that any and all filings and licenses are current. If your business is incorporated, are all the company reports and similar items up-to-date?
Many of us over the years tend to use personal items at work. If these are not included, they should be itemized
You should meet with both your lawyer and your account to discuss preparing the business for sale.
Review your lease, if applicable. You should have a copy to provide to a buyer once an agreement for the sale of the business has been arrived at; normally such an agreement will have a number of such conditions that must be satisfied before the deal becomes firm and binding. You probably will not want to provide such information until you are sure you have a committed, legitimate, qualified buyer who has signed an offer to purchase and placed a deposit in trust. As always, it is wise to have your lawyer review such documents before they become binding.
You will need accurate, up-to-date financial statements, both an income and expense statement and a balance sheet. You will require a detailed list of the assets and inventory. A wise precaution is to have these prepared in advance and update them once a transaction has been entered into. Discuss this with your accountant. It would also be wise to prepare a list of suppliers and any existing cutomers for the purchaser.
Decide with your accountant how you should allocate the business valuation between assets, goodwill and inventory. This will often be the subject of negotiation between buye and seller and understanding your position in advance is a wise precaution.
Are there any taxation considerations you should be aware of? What regulatory matters may need to be addressed? Are there any other matters you should look into before you get into a negotiation?
Proper preparation and thoughtful consideration of the issues involved can help you conclude a successful sale with the best possible outcomes.
Please feel free to contact us with any questions you may have regarding the sale of your business.
Business Law: Other Important Legal Considerations
Workers Compensation Law
For most becoming and remaining gainfully employed is paramount. Occasionally, as a result of an accident on the job, downsizing or an inability of the employer or employee to get along, employment is lost. It is important for both employees and employers to know their rights and responsibilities under the law as often economic survival is at stake.
We seldom think of taxation as a legal issue. Interestingly, however, there are a myriad of laws and regulations which impose taxes on us. From time to time those tax levies are incorrect. It is always wise (and economically efficient) to have a relationship with a lawyer and an accountant that will enable you to have the correct information before taxes are paid.
There are several issues business owners need to be aware of regarding taxation.
The business structure you choose (sole proprietor, partnership or incorporated company) will impact on the business’ taxation on several levels. We repeat our previous admonition: before you start a business or before you make fundamental changes in your business consult professionals. Obtaining legal and accounting advise, taking the time to get information from the relevant taxation authorities can save you much grief, time and money rectifying problems after the fact.
All businesses need to realize that they will have to deal with:
- i) federal tax laws and regulations
- ii) provincial tax laws and regulations
- iii) municipal tax and business licensing laws