First, get a business valuation before you sell a business in California. Most certainly you will want to research the sale price of other businesses in your industry. In this regard, it is best to get an expert opinion from a business valuation expert (accountant, business broker, or business appraiser). Once you know what your business is worth, you will be able to successfully market it for sale.
As you prepare to sell your business, you must develop a sale agreement. Work with an experienced legal document preparer who can help you prepare your agreement. The agreement should accurately describe all the terms of the purchase. The following terms should be addressed in your agreement:
- Names of seller, buyer and business
- Detailed description of the asset being sold
- Purchase price of asset
- Terms of the sale including payment
- Business transition information (who will run the business during the sale transaction)
- Date of closing
- Access to business information
Next, review internal company documents and get your business affairs in order. As a seller, you want to make sure there is a smooth transition with the new owner. Most importantly, work with a skilled negotiator to find potential buyers and get the best sale price for you. Once you enter into an agreement in principle with a serious buyer, be ready for a business inspection. A buyer will inspect your business to make sure everything checks out before approving/entering into the final sale transaction.
Finally, thoroughly document the business transaction. For example, depending on how you document the sale of your business, you may need a variety of legal documents. Common documents used to sell a business in California include a promissory note, security agreement, confidentiality agreement, non-compete agreements, company resolutions, or stock transfer certificate.
Lastly, when you sell a business in California you will want to immediately close its bank accounts, cancel your general liability insurance and file any necessary documents with the California Secretary of State. You will need to follow many steps in winding up your business interest. A People’s Choice offers many business services. Contact A People’s Choice for help in drafting the necessary legal documents to sell a business in California. Call today at 800-747-2780 for immediate help.