1. Develop a Strong Management Team. A strong management team for the Company is attractive to a buyer, especially if the Company’s owner(s) do not want to continue to manage the business following the sale. Consider incentives (such as offering stock options) to attract and retain key management through time of sale and beyond.
2. Update Company Minute Book. Confirm that minutes reflecting actions/meetings of the Company’s owners, board of directors, officers and managers are current. Confirm that complete copies of the Company’s articles, bylaws, partnership agreement, operating agreement, as applicable, and all amendments are included.
3. Contract/Permit Review. Confirm all material contracts in the name of the Company, have been signed by applicable parties, and have not expired. Confirm that all governmental permits and licenses are issued in the name of the Company and have not expired. Identify which contracts, permits, leases, and licenses will need the approval of the other party to transfer to the buyer.
4. Intellectual Property Review. Confirm all patents and trademarks that are intended to be owned by the Company are actually registered in the name of the Company rather than an individual owner, employee, or other person. Consider registration of trademarks used by your Company.
5. Document Affiliated Transactions. Document material transactions between the Company and its owners, directors, and employees (i.e. loans, leases, licenses, etc.).
6. Non-Disclosure Agreements. Make sure employees of the Company who have access to confidential and proprietary information of the Company are subject to a strong confidentiality/non-disclosure agreement to protect the Company’s trade secrets.
7. Develop a List of Possible Candidates to Acquire the Company. Research and identify possible purchasers for the Company. List could include competitors, companies with complementary line of business, private equity groups, key management of the Company, or family.
8. Engagement and Coordination of Professional Advisors. Make your sure lawyer, accountant, business broker/investment banker (if any), and other applicable professional advisors are working together to address transaction matters (i.e. structure of sale transaction, tax effects, legal effects, document review, etc.).
9. Confidentiality Agreement. Make sure each prospective buyer to whom Company information will be provided signs a confidentiality agreement before providing such information.