Selling a business requires you to reveal vast amounts of information that may not be at your fingertips or even exist. Since the buyer will ask for them, you must organize contracts, records, and insurance policies as you prepare to sell a company and make them easily available. These documents will be needed during the selling process, and having them ready for review will increase your credibility and authority as a competent manager running a valuable business.
Corporate Records
The corporate record book and annual reports, if you're selling your entire business and not merely some assets, should also be readily accessible. Your corporate record book contains your original incorporation papers, business name registration paperwork, bylaws, trademarks, shareholder list, minutes of directors' meetings, and other documents. Small companies are sometimes lax here. If these don't exist or sorely need updating, your corporate attorney should work with you to create them. A limited liability company is not required to retain documentation as extensive as a corporation's. Nonetheless, you must show the document that created your business and an operating agreement. Larger, multi-member, limited liability companies often don't document minutes of membership meetings or written consents of members for actions taken, but they should be on hand.
Processes and Methods
Documenting key processes and methodologies will assure that important knowledge does not depart with anyone leaving your business, including you. Almost every organization has vital information that isn't written down. It is imperative to capture as much as possible to demonstrate viability and value to potential buyers and to assure a successful transition. This is particularly true for you as well as for workers and management who may leave or are nearing retirement. Operations and procedures manuals should be up to date. Some of these documented processes belong in the contingency plan discussed in a later article.
These are difficult efforts to estimate since they are dependent on the size of your business, state of your current documentation, and the complexity of your operations and methodologies. It can be useful to bring in consultants with "fresh eyes" to work with your organization to produce high-quality manuals and other documentation.
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