Selling Your Small Business? 3 Legal Tips
Need some legal tips on selling your business? That's not suprising considering that the number of small businesses that were sold in 2013 increased by 41.7 percent in the third quarter.
Mergers-and-acquisitions insiders predict that the market will pick up this year, CNBC reports. With consistently low interest rates, this may be a good time to say bon voyage to your business and hello to endless vacation days.
If you're planning to sell your small business, here are three legal tips to get you started:
- Calculate the value of your business. One legal tip for selling your small business is to know the value of your company and the amount of your personal interest. If you're the sole owner of the company, you'll just need to work with your accountant to make sure that all your debts are paid off or to figure out a repayment plan with creditors. However, if your business is a partnership, make sure that all of the assets are distributed according to the partnership agreement and to close all business related bank accounts.
- Get your intellectual property in check. If your small business' logo, trademarks, copyrights, or patents are a valuable part of the company, then be sure to properly register them before selling your business. Registering intellectual property gives the owner exclusive rights to use or license them and can be strong revenue source. By having them registered before the sale, you may be able to get sell your business at a higher price. However, registering intellectual property, particularly patents, can be a confusing and lengthy process, so it's best to seek an experienced intellectual property attorney near you for more guidance.
- Organize all business organization documents. Before a small business gets acquired, the buyer will want to make sure all of your ducks are in order. The buyer will likely ask to see your tax returns, credit reports, fixed assets, and any documents relating to the formation of the business, like Articles of Incorporation or company bylaws.
Although selling your business is an exciting time, it can also be a hectic process. For more legal guidance and tips, consult a local attorney who specializes in business acquisitions.
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Related Resources:
- Selling Your Business (U.S. Small Business Administration)
- Want to Sell Your Company? It's Complicated (FindLaw's Free Enterprise)
- 3 Things To Do Before You Sell Your LLC Interest (FindLaw's Free Enterprise)
- Necessary Steps to Dissolve Your Company (FindLaw)