expenses and transactions. If there
has been any financing obtained or
security given by the company, plan to
disclose this information as well.
A buyer will likely review the compa-
ny's incorporation documents and its
minute book, which should accurately
reflect the company's history, includ-
ing its directors, officers, shareholders
and any significant transactions. For
a share sale, one should ensure the
history of the shareholders has been
recorded correctly. Mistakes or miss-
ing records will alarm the buyer and
delay the sale.
claims: If possible, obtain a release
from the other party. A buyer will not
want to assume these liabilities. Out-
standing claims will likely discount
the purchase price.
accurate: If the business doesn't
a buyer will need to know the terms
of employment for each employee.
Severance needs to be assessed to
determine if the seller or the buyer
will be liable for employee turnover.
Identify the employees who are
necessary for the company's continued
success.
the company operates out of leased
premises, a buyer will need to know
the terms of the lease and whether
it is assignable. The same applies to
leases of equipment.
contracts: If the business doesn't
have written contracts, document the
key terms of its relationships. The
buyer will need this information to
understand the business and assess
its value.
Any of these items required to run
the business will either need to be
will have to apply to obtain them.
nance records: Ensure any records
for critical equipment of the business
are readily available. If a business
owns real estate, a buyer will likely
require an environmental inspection
of the property.
information regarding receivables,
including their aging.
ties: Discuss with the advisory team
how best to take advantage of any
tax planning opportunities such as
estate freezes, family trusts and
holding companies, which can lead
to tax savings.
Potential buyers may come from
several sources. Examples include
family members or key employees,
competitors or suppliers, as well as
companies who already serve the