While starting a business can be difficult, since you have to make many decisions that have lasting impacts, so is selling a business in California. There are multiple, complex steps that must be completed, which are best done with the aid of a corporate lawyer. Such steps that must be taken include disclosure, investigating tax liability, reviewing contracts and accounts, and ensuring employees have been dealt with appropriately.
Owners can decide to sell their businesses for many different reasons, and be approached by a buyer in many different (legal) ways. When deciding to sell your business to a potential buyer, ensure that you have a Purchase and Sale Agreement that includes provisions of full disclose of liabilities. This agreement should also indicate other crucial information about the business, like taxes, contracts with third parties, debts, obligations, and wages.
Furthermore, there should be an investigation and review of employee responsibilities, tax liabilities, and contracts. These three aspects are very important to review since a buyer will want to know crucial details before making a decision, and a failure to show this review can complicate a possible sale of business. The buyer should be made aware of all employees in the business, and information relating to them like wages, titles, and benefits. The seller must ensure that upon sale of the business, the employees have received all necessary items (ex: bonuses). Next, all tax liabilities must be dealt with and explored openly. There are many different taxes that can apply upon sale of a business, but those that relate to its operation prior to the sale should be dealt with by the seller. Moreover, almost every aspect of a business requires having contracts. These can be for leases, other office spaces, technology, and so on. These must all be presented to the buyer so that the buyer can adequately review them prior to the sale.
There are many more aspects to consider when selling a business. The aforementioned are simply a summary of some of the steps involved. Also, the bigger and longer the business has been around, the trickier this process will be. Always ensure that every step has been correctly followed by consulting with an attorney who will know the exact details of such a transaction.