Business Transfer Checklist
When negotiating the sale of a business a business transfer is the final step. The point at which the business finally changes hands from the seller to the buyer. It comes after all the negotiations are finished, the contracts are written up and signed and money has changed hands. Think of it as the day you hand over the keys to the home you just sold.,
However, the sale of a business can be a little more complicated than a simple property transfer. The seller will need to account for every bit of property, assets and documents necessary for the operation of the business. They will need to transfer the keys to any brick and mortar offices and buildings owned by the business, online accounts and passwords related to the business, client and distributor lists, and anything else that may be integral to operating the business. That’s why a checklist could come in handy for such a transaction.
Why A Business Transfer Checklist Is Important
Businesses, especially those which have operated for years before their sale develop a complicated web of relationships. Over time a business produces records, licenses, deeds, trade marks, real estate contracts and a number of other documents and assets that need to be accounted for when ownership of a company changes hands.
While a lawyer should be able to assist with the process, there is no one who knows your business better than you. After all, you don't want to be stuck paying for an office, a storage facility, or a software account you forgot to transfer or cancel when you sold your business.
How To Maximize The Value Of Your Business
As your business changes hands you’ll want to ensure that its value is maintained. Maintaining or even improving the value of your business is not just a way to make the most money from the deal. But also ensures that your deal continues forward with good faith beyond the time that it has concluded. It establishes trust with the buyer and solidifies your own reputation going forward.
Retaining staff during a transition is an excellent way to maintain the value of a business. It ensures that the business can continue to operate through the transition and eliminates the need to onboard and train new staff members.
It's also important to be open and transparent with customers and clients. Notifying them of the sale and building the kind of trust that will be necessary to maintain brand loyalty.
It's a good idea to inform the buyer of the workplace culture and the standards and practices of the business. The roles and responsibilities of each staff member, schedules, turnover rate, and the company's hiring processes.
Evaluating your company's software and technology is another important step that ought to be completed before a transfer of ownership. Whether the business uses in house software or a subscription-based tech, the seller may need to transfer licenses and accounts to the buyer.
It's a good idea to meet with an intellectual property lawyer and get a proper accounting of the intellectual property that is to be transferred. Identify any copyrights, trademarks or patents that need to be transferred. Some licenses and patents may not be transferable and may require the buyer to apply for them on their own. This is why it is important to consult a lawyer to help you through the transfer process.
Proper bookkeeping is also a major factor in the value of your company at the time of transfer.
Your account can help you sort through revenue, costs, profits, losses and all other information that a buyer will need to know to successfully conduct business after the transfer. It's also important to sort out the company's books before a transfer to ensure that any personal accounts or finances are not tied to the company at the time of transfer.
Steps For Transferring Your Business
By the time you get to the point of transferring your business you will no doubt have dealt with a lawyer. Your lawyer should be able to provide everything you need in order to properly transfer your business to its new owner. But it's always good to know what you're getting into and what to expect when the time comes to transfer your business.
Here is a list of some things you'll have to have on hand when the time comes to transfer the business:
- The full legal name of your business and ID number as registered with the government.
- All addresses, phone numbers and other contact information associated with the business.
- Banks and financial institutions which the business is connected to and anyone who is authorized to access these accounts.
- Any material assets, buildings, offices, mortgages and leases that are directly connected to the business.
- Agreements or contracts the business is entitled to uphold with distributors, clients, customers or government agencies as well as any permits or licenses issued.
Depending on the nature of the contract negotiated, you will want to make sure that the slate is wiped clean before transferring your business and any personal accounts or information are no longer connected with the business.
You will also have to notify those who might be affected by the sale of the business and close out accounts that are outstanding
- Creditors and financial institutions should be notified of the sale and informed as to how the business' outstanding debts will be paid. Either by the seller before the final sale or the buyer if they have agreed to assume the businesses debts.
- Any licenses or permits that cannot be transferred should be canceled.
- Any leases, insurance policies and outstanding financial obligations that will not be assumed by the buyer should be paid out and cancelled.
- All government accounts connected to the business should be closed.
- Ensure payroll for employees and taxes are all paid out.
These are just a few things to consider when transferring your business, but keep in mind that the sale of any business is a complicated process and consulting a lawyer is always a good idea.