Selling a Business: Checklist for a Smooth Closing

Hiring a business broker Orange County is obviously the number one thing you have to do when planning to sell. The broker will help set the selling price, market your business, prequalify buyers, help with negotiations, assist with the paperwork and ensure everything is on the right track. An area where most sellers get stuck in is closing. Once everything has been done and it is time to transfer ownership, so many things may get in the way and keep you from closing fast. Here is a quick checklist that will help you prepare for a smooth closing.

Schedule the closing
You need a closing date in order for all the parties to be focused. When all the parties are available, you should go ahead and set the closing date. The best time to close is in the morning hours so that you can get to the relevant government offices and banks following the closing. Business brokers Orange County recommend closing in the last day of the quarter, month or pay period. This will simplify the proration of the monthly expenses that transfer with the sale.

Finalize the purchase price
The final selling price needs to be finalized so that it reflects the outcome of the negotiations, prorated rent, utility and other fees. You also need to account for the final accounts receivable, final inventory value and the accounts payable value.

Get the documents ready
Not having all the documents ready is the number one reason why there are delays in closing. Your business broker will make you aware of all the relevant documents. Make sure they are clean and organized. If yours is a corporation, your transactional attorney will pass the corporate resolution authorizing the sale.

Get the tax forms ready
You will be dealing with a lot of forms such as those needed by the Secretary of State or Corporation Commission, transfer documents for the vehicles, IRS Form 8594 and so on. Your transactional attorney and business broker Orange County will help with this.

Prepare closing/ settlement sheet
This will list the purchase price and the costs as well as price adjustments that will be paid by or credited to the buyer and seller. Your attorney will help with this document unless you are closing through an escrow.

Other important things you need to add to the list include:

  • Confirm insurance requirements
  • Prepare for the transfer of agreements and contracts
  • Prepare a furniture and equipment sale list
  • List as well as transfer of work in process
  • Prepare the loan documents
  • Prepare the bill of sale
  • Prepare personal agreements
  • Prepare the transfer of building lease
  • Prepare the succession agreements
  • Prepare a bill of sale

The sooner you prepare the better. The rule of thumb is to ensure that you have the right help. Find experienced business brokers Orange County to help with the sale.

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