Where do I start when selling a business?

Selling a business generally requires legal, corporate, financial and tax preparation before the transaction is completed.

One of the first questions is whether the transaction will take the form of a sale of the company's shares or a sale of its assets. These two types of transactions have different legal and tax consequences and require different documents and formalities.

Before undertaking the transaction, it may be particularly useful to:

• check and update the minutes book;
• regularize corporate documentation, if necessary;
• verify the registers of shareholders, directors and officers, as well as the registers of securities and transfers;
• confirm the shareholding structure and ownership of shares when a sale of shares is being considered;
• examine the shareholders' agreement, if one exists;
• to gather the company's main contracts;
• check if any contracts contain restrictions, special rights or consent requirements in the event of a sale or change of control, when a sale of shares is being considered;
• prepare financial statements and other relevant financial information;
• verify the main assets, permits, licenses and other rights necessary for the business activities, when a sale of assets is being considered;
• assess the tax consequences of the proposed transaction.

When the sale involves shares, it is particularly important to ensure that the minutes book and corporate records allow for the proper tracing of share ownership and transactions carried out on the shares over the years.

When the sale primarily involves assets, it is necessary to determine which assets, contracts, rights, and obligations will be transferred and to verify any authorizations or consents that may be required. When the transaction involves all or substantially all of the company's assets, specific rules under applicable law may also need to be followed, particularly regarding the authorizations or approvals required to complete the transaction.

It is generally best to complete this preparation before the due diligence process begins. This allows for the identification of missing documents or irregularities that may need to be corrected before the transaction is finalized.

In summary , preparing for a business sale typically begins with choosing between a share sale and an asset sale, followed by a review of legal, corporate, financial, and tax documentation. Early preparation facilitates due diligence and the smooth execution of the transaction.