There comes a time in nearly every California business owner’s life when he or she must consider getting out of the business. Whether this means handing over the reigns to the next person in charge or selling to a buyer, you need to ensure your company is in good shape. A trusted California business law attorney can help you work out all the details for selling or passing on your business. The following are some ways to help ensure that your business is in tip-top shape and that the transition goes as smoothly as possible.
Accurate, Organized Financial Records: One of the most important things that you need to have in order to ensure a successful transition is financial records. You will want to ensure that they are accurate, streamlined, and in compliance with generally accepted accounting practices. The best way to ensure this happens is to review your financial history and reports on a regular basis rather than trying to create all of these records when it is time to sell. A company that has consistent records is more attractive to a buyer and minimizes their risk.
Verifiable, Current Records: When you sell your business, you will likely be required to execute a warranty stating that all of your company records are accurate in regard to the owners and organizational documents, current on incorporation agreements and operating agreements, in good standing with the California Secretary of State Office, and in compliance with administrative and government regulations at the state, local, and federal levels. You should also ensure that you have all of the company policies and guidelines readily available and in order before selling. This will reduce the likelihood of any future liability for non-compliance.
Adequate Management of Intellectual Property: Intellectual property is an asset just like real estate. It must be organized, monitored, and registered to protect its value. Intellectual property may include assets that you might not expect, such as new and innovative technology, a loyal and extensive social media following, your online presence, customer lists, and trademarks and copyrights. It is important to identify, review, and itemize these items before your sale. This will allow you to address any issues with infringement and protect your ownership interests.
Solid Employee Policies: Do not underestimate the importance of keeping organized and accurate records on your employees. In addition to being a good practice, it is also required by law to keep documents such as employee equity ownership, compensation and benefits, policies regarding the hiring and termination of employees, employee contracts, and many other records that could impact a buyer’s rights and responsibilities regarding employees.
Contact an Experienced Business Law Attorney Today
Selling your business, especially one that you have been dedicated to for decades, can be a difficult process. By following the above tips, it can make the process go much more smoothly. However, having solid, experienced, and trusted legal representation is also a key part of selling your business, whether large or small. The attorneys at Verhagen Bennett LLP can review the details of your business and your objectives and advise you on what actions you can take to not only increase the value of your business, but help it look more desirable to potential buyers. Contact us today to schedule a consultation.
(image courtesy of Michael Prewett)
© 2019 Verhagen Bennett LLP — This article is for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.