Are you considering selling your company or positioning it to be an attractive option for the right buyer? Preparing your business for sale in California takes several months and usually more than a year. In today’s rapidly changing business climate, you must be ready to act quickly and efficiently, and one of these steps is positioning your company or corporation to acquire or be acquired.
Steps to Preparing Your Business for Sale in California
- Ensuring your corporate entity is updated, in good standing with the State of California, and all corporate documents are in place is the first step.
- A thorough review of your books, financial reports, tax filings, payroll, receivables, and payables is necessary to prepare a company for sale.
- Locking in key employees and key customers will be a primary concern of any buyer. Beat them to the punch.
Selling Your Company Requires Substantial Planning and Preparation
Selling your company will require substantial planning and preparation, and that will take much more than you may initially perceive. What are the first steps to preparing your business for sale in California? A company is not stronger than its corporate entity. The corporate veil is what separates a business from its owners, and one of the first things a new buyer will want to inspect is the integrity of your business entity. This is true for the smallest of LLCs and the largest of C Corporations alike.
Why does it take so long to sell an LLC or corporation here in California? The earlier you begin business succession planning and your exit strategy, the more options you will have downstream.
The business advisory group, legal, tax, and accounting experts at Allen Barron, Inc., are prepared to help you move the process more quickly and efficiently. Corporate housekeeping usually involves making sure the articles of incorporation, bylaws, operating agreement (LLC), and shareholders’ agreement (corporation) are up to date. Have all meeting minutes and resolutions for the past several years been documented and organized? Have stock or membership certificates been consistently and appropriately logged, issued, and aligned with existing business ownership records? Is your business entity in good standing with the State of California and any other state in which you do business?
Preparing Financials and Tax Filings for Buyer Due Diligence
To successfully complete due diligence, a buyer will want to see up-to-date and positive financial statements and books. Most businesses do not have their books and financial statements, as well as taxes, up to date and ready for review by a potential buyer. This process alone can consume months. Allen Barron’s business estate planning services for business owners, legal services, and tax attorneys assist in developing business succession plans, while our accounting and tax professionals update financials and taxes. We organize the information in a format that makes it easy for a potential buyer to work through and complete due diligence.
Preparing Your Business for Sale in San Diego Often Requires Locking In Key Relationships
Preparing your business for sale in California often involves protecting and strengthening key relationships with vendors, customers, and employees. The business advisory group at Allen Barron, Inc. can help you develop a strategy for when to inform key employees, how to secure their commitment, and how to protect key customer relationships and the integrity of your business while preparing it for the market. Buyers are looking for a well-run business. They are also looking for candor and transparency from the seller. Getting your financial and organizational house in order provides additional confidence to look a potential buyer in the eye with confidence and enthusiasm regarding the present state and future potential of your business.
Why should you consider preparing your business for sale in California or here in San Diego? You never know when the opportunity to acquire or be acquired will arise. Preparing your own company positions you to pursue all opportunities, mergers, acquisitions, and sales offers that might arise.
We invite you to learn more about the integrated tax, legal, accounting and business consulting services of Allen Barron and contact us or call today to schedule a free consultation at 866-631-3470.
