How to sell a corporation that’s doing good business?
By Nina Kaufman, Esq.Q.: We have built enterprise-class software products for banking, education and manufacturing segments. We have an established set of clients and a recurring revenue stream. How do sell a corporation in the technology industry?
A.: There are a number of issues to consider when you’re looking at how to sell a corporation:
- When do you want to sell, and who is your advisory team to help you make the decision?
- What is the market value of your business, including your intellectual property assets?
- Where will you find a buyer? Are you being approached by another company (which is triggering this option for you), or to you want to go out to the marketplace to find one?
- How will you structure the deal? What’s your price? What do you want for the payment terms? Will you accept financing or do you want all cash? What are the tax consequences?
- Who will be helping you through the deal process – e.g., drafting the letter of intent, conducting due diligence, and filing any necessary paperwork with the IRS (hopefully, you’ve addressed this in #1)?
Start with Step #1: get a solid team of advisors in place to make sure nothing falls through the cracks and that all issues are identified when it comes to having a company that sells—and for good money.
What other law questions do you have about transfer of ownership and closing a business?
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