There are many different items to consider if you are thinking about selling your business and retiring or semi-retiring. Your business provides you with a living and a place to put your energy each day. Are you ready and prepared to give this up? Listed below are a number of items to be considered in selling your business.

Going for the Big Bucks 

1.    What will you need to live on after the business is sold? This will help you focus on how much you need to receive from the sale of the business. 

2.    Are you going to sell assets or shares of the company if it is incorporated? Generally, the seller wants to sell shares and the buyer wants to buy assets. This difference often leads to a compromise on price. 

3.    What is the company selling, what does it own? You need to determine what assets will be sold and what you want to remove before the business sells. 

4.    How much do you want for the business? This will be determined by the fair market value of assets held (the goodwill which is generally based on the sales and net income), and the market (how many willing buyers are available).

5.    Generally, the seller will propose a price and the buyer will agree or prepare a counter offer. It is up to the purchaser to have the purchase document prepared by their lawyer.

6.    Any areas where personal guarantees have been given should be withdrawn prior to the new owners taking over.

7.    Signing authorities on bank accounts should be removed and financers and suppliers made aware of the change. 

8.    It will have to be determined who will be responsible for any accounts receivable, prepaids, accounts payable, corporate taxes, and debts up to the change of control. 

9.    If there is a sale of shares there will be a change of control as of the date of sale and a new fiscal year end occurs requiring a corporate tax return. It should be determined who is responsible for this. Generally, it is the previous owners. Completion dates for a sale should always be month end. Responsibility for maintaining old records must also be determined. 

10.  Any preauthorized payments should be reviewed and cancelled, if appropriate. 

11.  All leases should be reviewed to determine if they are transferable to the new owners. 

12.  Any other contractual agreements should be reviewed to determine if they need to be changed. 

13   Often employees are laid off and the new owners hire the employees they desire. Notice may need to be given in order to avoid large severance payouts. 

14.  Any life insurance payable to the company should be reviewed and changed as required. 

15.  It is not uncommon for a sale to involve financing by the vendor. If you are financing all or part of the sale the security you get and the time frame for receipt of funds is very important. 

16.  Contacts for GST, PST, WCB, source deductions, income tax, and any other regulatory bodies should be changed. 

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