What legal documents do I need to sell my business in Florida?
What legal documents do I need to sell my...
The process to “sell my business” begins with the attempts to attract qualified buyers.
Some of the Legal documents required to sell a business include:
- Financial Statements for Current and Past two-three Years
- Personal Financial Statement Form for Buyer to Complete
- Note of Seller Financing
- Accounts Payable and Accounts Receivables Aging Reports
- Inventory List with Values Detailed
- Offer-to-Purchase Agreement
- Financial Trends and Ratios
- Non-Disclosure Confidentiality Agreement
- Seller’s Discretionary Earnings and Cash Flow Statement
The process of selling your business will begin when you start attracting potential and qualified buyers. It doesn’t get serious attention until you provide hard-copy versions of accurate figures, facts, and financial statements for the business. Once you present all these documents, the selling process begins.
5 Essential Documents I Need to Sell my Business in Florida
Selling a business in Florida involves signing and drafting much paperwork. Unfortunately, too many business owners rush through these transactions. They don’t have time to read and understand what the agreement is all about. Speeding through things may increase the chance of a disagreement between the buyer and the seller. Read on to know the five most common and important documents involved in selling a business.
The Engagement Letter from Your Investment Banker
An introductory engagement letter lays out the specifics of the working relationship between a seller and a business broker. It allows each party to have a clear understanding of their responsibilities. At a minimum, the engagement letter should cover a fee agreement that establishes how to pay your broker for their services.
Don’t be surprised if you come across an exclusivity clause while you are reading over your engagement letter. Exclusivity clauses exist to make sure that this loyalty and commitment reciprocate. Agreeing to an exclusivity clause or not is your decision. Without one, finding an excellent and experienced broker who wants to work with you will be more of a challenge. A broker like Julie Brigman can help you to get the best deal possible.
Finally, we will come to the termination clause and the “tail.” These clauses talk about the steps that need an ending for the agreement. Usually, this involves advance written notice. Tails mainly exist when the seller makes another transaction with a third party they met through their advisor.
The Teaser
“The teaser” is the most critical document for selling a business in Florida. It’s essential to have it professionally drafted. The document that outlines the investment opportunity for potential buyers is called a teaser. It sends out “blind” – that is to say, without any information that identifies the company.
Like teaser trailers for movies, the idea behind a teaser for selling your business is similar; you want to provide something that excites the buyers. However, that doesn’t mean that you need to make your company look more appealing than it is. Quality teasers offer an honest and comprehensive overview of a business, including the sale’s objective, so that everyone stays on the same page.
The Non-Disclosure Agreement (NDA)
Non-Disclosure Agreements or NDAs, are agreements that you need to have come across before. The purpose of NDAs is to secure confidential business secrets, trade secrets, and other sensitive information When selling a business in Florida. Parties share many otherwise personal documents during these transactions. You should ensure that a buyer manipulates your trade secrets, such as recipes or even your lists of past clients and vendors.
Letter of Intent (LOI)
Finally – a document that you won’t have to draft for yourself as the seller. A letter of intent or LOI is the buyer’s document to the seller after reviewing the business up for sale. It’s a good indication that the buyer is also serious about making a deal. The specifics depend on the nature of the agreement but usually entail:
- The deal’s structure
- The desired time frame
- The consideration
- Closing conditions
- Requirements for due diligence
Just like a teaser, the letter of intent facilitates understanding between the seller and buyer.
The Purchase Agreement
It’s time for the purchase agreement. At this stage, you will certainly want the help of an experienced broker. Purchase agreements are essential and binding, and you would do well to have the assistance of someone familiar with business law. It’s the result of all the offers, terms, and other items that you’ve been negotiating over so far. A good broker like Julie Brigman can help you make every purchase agreement tailor-made for a given transaction or deal.
Want the Best Deal for Selling Your Business? Hire Julie Brigman.
Are you looking to start a business or grow your current business or need help understanding legal documents for selling your business? Contact Julie Brigman, the best business broker in Jacksonville, FL.
