Jason Pourakis Partner - New Jersey, United States
There comes a time in every company’s lifecycle where the decision has to be made whether or not to sell the business. This turning point can be due to several factors – lack of proper management team to continue the business, lack of a younger familial generation to take over, or simply ‘it’s time’ due to outside competitive or financial pressures. The best practices below outline important practical considerations to address when going through this process.
Selling a business is like selling a house – you must prepare it for the market. It is a process, not an event. This requires time, teamwork, research, planning and commitment. At the beginning of the process, you should:
The below information should be kept ready and available to assist the buyer in completing their due diligence process as quickly and easily as possible.
Business owners should meet with legal and tax professionals before a sale to discuss tax strategies for making the company attractive to buyers, while minimizing their own tax liabilities. One of the major considerations in structuring a sale is the tax consequence. Taxes on the transaction will depend on two factors:
It is important to clearly define in the purchase agreement the responsibilities of the buyer and the seller, specifically who is responsible for preparing and paying for the tax returns pre and post-sale.
The individual seller should also consider the following items as the sale moves toward its conclusion:
The sale of a business can seem like a daunting task, but with the proper planning, adherence to best practices, and guidance from business professionals it can be a smooth process. For more information, please contact Jason Pourakis, Christopher Lieto or Paru Shah from Mazars USA.
Jason Pourakis – Partner at Mazars USA, New Jersey
+1 (732) 475 2159
Christopher Lieto – Partner at Mazars USA, New Jersey
+1 (732) 475 2121
Paru Shah – Manager at Mazars USA, New Jersey
+1 (732) 475 2199
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