The Complete Guide to Selling a Business

The Complete Guide to Selling a Business

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The Complete Guide to Selling a Business

New Edition!

, 4th Edition

Out there somewhere is a buyer looking to buy a business like yours -- so if you're ready to sell, make sure that you protect your interests and maximize your profit with The Complete Guide to Selling a Business. It covers:

  • pricing your business and valuing your assets
  • analyzing the tax issues
  • limiting your liability

Includes all the legal forms you need!

Product Details

The most comprehensive, easy-to-use guide to selling a business available!

Out there somewhere is a buyer looking to buy a business like yours -- so if you're ready to sell, make sure that you protect your interests and maximize your profit with The Complete Guide to Selling a Business. It covers:

  • getting your business ready to sell
  • pricing your business and valuing your assets
  • finding the right buyer
  • analyzing the tax issues
  • negotiating a payment plan and other terms of sale
  • planning your future relationship with the business
  • limiting your liability
  • working with lawyers, accountants and brokers
  • closing the deal and transferring the business to its new owner

The Complete Guide to Selling a Business helps you create more than two dozen crucial documents for both asset and entity sales, including:

  • the sales agreement
  • confidentiality letter
  • promissory notes and security agreements
  • noncompete and consulting agreements
  • closing checklists

This edition edition is completely updated with the latest tax considerations, and now provides more advice on marketing the sale of your business.

There are literally dozens of competing titles on the market, but none can match The Complete Guide to Selling a Business for sheer depth, accuracy and ease of use.

“A comprehensive look at a complex issue made understandable—a vital business resource.”-Glen A. Ross, CPA, CVA, Ross Valuation Group

“For an overview of the purchase process, see The Complete Guide to Buying a Business.” - San Francisco Chronicle

Number of Pages
Included Forms

  • IRS 8594, Asset Acquisition Statement and Instructions
  • Confidentiality Letter
  • Attachment to Sales Agreement
  • Amendment of Sales Agreement
  • Promissory Note
  • Security Agreement for Asset Sale
  • Security Agreement for Entity Sale
  • UCC Financial Statement and Addendum
  • Escrow Agreement for Stock Certificates
  • Escrow Agreement for LLC Transfer Certificates
  • Bill of Sale for Business Assets
  • Statement Regarding Absence of Creditors
  • Assignment of Lease
  • Assignment of Contracts
  • Consent to Assignment of Contract
  • Assignment of Intellectual Property
  • Directors' Consent to the Corporation's Sale of a Business
  • Shareholders' Consent to the Corporation's Sale of a Business
  • LLC Members' Consent to the Company's Sale of a Business
  • Partners' Consent to the Partnership's Sale of a Business
  • Covenant Not to Compete
  • Independent Contractor Agreement
  • Closing Checklist for an Asset Sale
  • Closing Checklist for an Entity Sale
  • Asset Sale Agreement
  • Entity Sale Agreement

About the Author

Table of Contents


Your Companion for Selling Your Business

  • Is This Book for You?
  • Will You Still Need to Hire Lawyers, Accountants, or Other Professionals?

Part 1

Overview of the Process

1. Deciding Whether -- And When -- To Sell

  • Deciding Whether or Not to Sell Can Be Agonizing
  • Do You Have a Saleable Business?
  • Working Out Problems With Your Co-Owners
  • Choosing the Best Time to Sell
  • If You Need to Leave the Business, But the Time Isn't Right to Sell
  • Staying Involved With Your Business
  • Protecting Your Future Ability to Earn a Living

2. The Key Steps in Selling Your Business

  • Figuring Out What Your Business Is Worth
  • Preparing Your Business for Sale
  • Creating a Plan for the Future
  • Marketing Your Business
  • Negotiating the Deal: Key Sale Issues
  • Signing a Sales Agreement
  • Closing Your Sale

3. The Key Legal Issues in Selling Your Business

  • Take Presale Legal Protections
  • Understand the Differences Between Selling the Business Entity or Just Its Assets
  • Be Clear on What You'll Sell and What You'll Keep
  • Understand the Transfer of Intellectual Property
  • Protect Yourself Against the Buyer Failing to Make Payments
  • Assure Your Ability to Earn a Living Later: Guidelines for Noncompete Agreements
  • Limit Your Legal Liabilities to Third Parties Once the Business Changes Hands
  • Protect Yourself Against Unintended Liability to the Buyer
  • Comply With State and Local Laws That May Affect Your Sale

4. Tax Considerations When Selling Your Business

  • An Overview of Key Tax Issues
  • Understanding the Federal Tax Rate That Applies to Your Sale
  • Tax Issues When Selling the Business Entity
  • Selling the Assets of a Business
  • Asset Sale by a C Corporation
  • Asset Sale by an S Corporation
  • Asset Sale by a Sole Proprietorship or Single-Member LLC
  • Asset Sale by a Partnership or Multimember LLC
  • Allocation of the Purchase Price

5. Putting a Price on Your Business

  • There's No Universal Pricing Formula: Many Factors Affect Price
  • Sales of Comparable Businesses
  • The Income Valuation Approach
  • The Asset-Based Approach
  • Industry Formulas and Rules of Thumb
  • How Appraisers and Other Experts Can Help You Set the Price
  • Putting It All Together to Price Your Business

6. Working With Lawyers, Accountants, and Brokers

  • Lawyers
  • Accountants
  • Business Brokers

Part 2

Getting Ready to Sell

7. Preparing Your Business for Sale

  • Make Your Business Attractive to Buyers
  • Get Your Paperwork in Order
  • Show How Profitable Your Business Really Is: Restate Your Profit and Loss Statement
  • Take Steps to Improve Business Profitability
  • Add Value to Your Lease
  • Communicate With Employees About the Sale
  • Clean Up Existing Problems
  • Nail Down Vital Relationships With Customers and Suppliers
  • Prepare a Checklist of Presale Tasks

8. Finding the Right Buyer

  • First, Look for Buyers Close to Home
  • Strategic Buyers
  • Special Concerns When Approaching Competitors
  • Marketing Your Business by Word of Mouth
  • Marketing Your Business Through Advertising
  • How Business Brokers Can Help Find Buyers
  • How to Quickly Size Up Prospects

9. Structuring the Sale

  • Asset Sale vs. Entity Sale
  • Lump Sum Payment vs. Installments
  • How to Structure an Installment Sale
  • Ten Strategies to Protect Yourself in an Installment Sale
  • Doing Future Work for the Business
  • Restrictions on What You Do Next: Noncompete Agreements
  • The Future of Key Employees
  • Keeping the Buyer Motivated

10. The Investigation Stage: How Sellers and Buyers Check Each Other Out

  • The Buyer's Investigation of Your Business
  • Honesty Is the Best Policy: The Importance of Full Disclosure
  • Business Information the Buyer Will Want to See
  • Protecting Sensitive Information With a Confidentiality Agreement
  • Why and How You Should Check Out the Buyer
  • Practical Steps for Evaluating a Buyer

11. Drafting a Letter of Intent

  • Why Use a Letter of Intent?
  • What to Put in Your Letter of Intent
  • Why You Should Only Sign a Nonbinding Letter of Intent
  • Format for a Letter of Intent

Part 3

Preparing the Sales Agreement

12. Preparing the Sales Agreement and Other Legal Documents

  • Overview of Your Sales Agreement
  • Related Legal Documents
  • Well-Drafted Documents Are Crucial
  • Preparing Your Sales Agreement and Related Legal Documents
  • How to Prepare Attachments to Your Sales Agreement
  • Steps in Finalizing Your Sales Agreement and Other Documents
  • Amending Your Sales Agreement

13. Who's Selling, Who's Buying -- And What's Being Sold

  • Naming the Parties
  • Identifying Your Business and What You're Selling in an Asset Sale
  • Identifying the Business and What You're Selling in an Entity Sale

14. The Sales Price and Terms of Payment

  • Sale Price: Asset Sale
  • Inventory: Asset Sale
  • Dealing With the Purchase of Accounts Receivable: Asset Sale
  • Sale Price: Entity Sale
  • Deposit
  • Payment at Closing
  • Promissory Note
  • Security for Future Payment: Asset Sale
  • Security for Future Payment: Entity Sale

15. Dealing With Liabilities and Representations

  • Liabilities in an Asset Sale
  • Liabilities in an Entity Sale
  • Representations: What They Are and Why They Matter
  • Seller's Representations
  • Buyer's Representations

16. Payments for Noncompete and Consultant Deals

  • Agreeing Not to Compete With the Business After the Sale
  • Agreeing to Work for the Business After the Sale

17. Other Important Legal Language for the Sales Agreement

  • Contingency Clause
  • Closing Arrangements
  • Dispute Resolution Clause
  • Technical Contract Clauses
  • Additional Optional Clauses

18. Signatures on a Sales Agreement

  • Required Signatures for Sole Proprietors on a Sales Agreement
  • Required Signatures for an Entity on a Sales Agreement
  • A Spouse's Signature on the Sales Agreement
  • Signature Clause in a Sales Agreement
  • Typical Formats for Signing a Sales Agreement
  • Accepting Personal Responsibility for Commitments in a Sales Agreement
  • Signing the Sales Agreement

Part 4

Preparing the Promissory Note and Other Sales Documents

19. Promissory Notes and Other Installment Documents

  • The Promissory Note
  • The Security Agreement
  • The UCC Financing Statement
  • Escrow Agreement for Entity Sale

20. Bill of Sale, Lease Assignment, and Other Documents for Transferring Your Business

  • Bill of Sale: Asset Sale
  • Bulk Sales Compliance
  • Assignment of Lease: Asset Sale
  • Assignment of Other Contracts: Asset Sale
  • Assignment of Intellectual Property
  • Approval of Entity's Sale of Assets
  • Transferring Your Entity
  • Assignments in an Entity Sale

21. Documents for Noncompete and Future Work Commitments

  • Covenant Not to Compete
  • Contract for Employment
  • Contract for an Independent Contractor

Part 5

Closing the Deal

22. Preparing for a Smooth Closing

  • Where and When to Hold the Closing and Who Should Attend
  • Documents for Transferring Assets
  • Documents for Transferring an Entity
  • Handling Last-Minute Problems
  • Moving On


A. How to Use Interactive Forms

  • Editing RTFs
  • List of Forms on the CD-ROM

B. Sample Sales Agreements

  • Sample #1 Asset Sale of a Restaurant by One Sole Proprietor to Another
  • Sample #2 Entity Sale of a Bookstore by the Two Shareholders to an Individual
  • Sample #3 Asset Sale of a Landscaping Business by a Single-Owner LLC to a Partnership



This Book Comes With a Website

Nolo’s award-winning website has a page dedicated just to this book, where you can:

DOWNLOAD FORMS - All forms in this book are accessible online. After purchase, you can find a link to the URL in Appendix A.

KEEP UP TO DATE - When there are important changes to the information in this book, we will post updates

And that’s not all. contains thousands of articles on everyday legal and business issues, plus a plain-English law dictionary, all written by Nolo experts and available for free. You’ll also find more useful books, software, online services, and downloadable forms.

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