Important Steps for Selling Your Business in California
Deciding to shutter a business can be motivated by many different factors. The plan may have always been to be sold, and closing the business was the goal from the beginning. Or perhaps the business owner is looking for a change. Whatever it may be, a lawyer can help walk you through the various and important factors associated with closing a business. Follow along below while we lay out some of the factors to consider.
Finding a Buyer + Negotiating Sale Price
When you as a business owner become interested in selling your business in California, you probably have a price tag in mind, and maybe even a buyer. It is important to carefully navigate the sale through every detail that comes up. You must think of things like other financial investors involved in the business, or if you have any patents required to operate the business. And are there outstanding contracts or liabilities the buyer needs to know about. Such things that need to be considered when considering sale price are:
- Liabilities and unresolved litigation
- Debts from a business
- Outstanding invoices and contracts
- Cash flow
- Tax ramifications
- The intent and reliability of the buyer
Assessing the Buyer and Preparing Paperwork
As stated above, it’s important to assess whether the buyer is reliable so that the deal doesn’t fall apart on their end. If there are other investors involved in your company, you may actually be legally obligated to ensure the buyer is trustworthy so that the co-investors are protected. This is part of your “duty of care”, or obligation to provide your co-owners with all the relevant information.
Closing the Deal and Assessing Tax Liability
If the sale of a business is profitable, the owners must pay taxes on their earnings. It is advisable to hire an attorney to help assess tax liabilities and how to protect the handing over of funds. Council will help you avoid breach of contract and execute a smooth sale.