By: Scott Lawrence | 09/13/21
After 18 months of economic uncertainty, many business owners who were forced to put their business sale plans on hold are now ready to go forward. It’s critical for CPAs to understand how they can best support their clients through the process of selling their business. Below, I highlight three important considerations for helping your clients:
Getting ready to meet with a potential buyer is an exciting time for any seller. To ensure a successful meeting, you will want to prepare with your client well in advance. Your client should feel equipped (and comfortable) to share information that the buyer will want to know. This includes the seller’s primary motivations for selling, the legal status of the business, and any business challenges that the owner has faced.
You will also want to advise your client on the documentation they should be ready to present to interested buyers such as balance sheets, cash flow statements and other records. A potential buyer might also want to see property documents, intellectual property assets, employee policies and other kinds of documentation if they’re relevant to the transaction. By making your client aware of everything the buyer could ask for in advance, you will eliminate the element of an unwelcome surprise once meetings with buyers are underway.
Above all else, what matters most is that your client walks away from selling their business feeling satisfied with the transaction. To that end, it’s important to consider the structure of the sale and help your client identify any opportunity to minimize their tax bill. Here are a few tax issues you’ll want to discuss with your client in-depth:
These considerations to keep in mind when helping a client get ready to sell their business are important. However, it’s equally critical to understand how you can use your expertise as a CPA to help your client prepare for the changes that come with such a pivotal decision as selling their business. For example, you may find it useful to provide an outline of how long your client will be able to live off the profits from the sale of their business. You might also be in a position to help them identify other sources of income if the business they’re selling is their main source of personal wealth.
At the end of the day, knowledge is power. Coming to the table with the right information about tax considerations for a business sale will help you and your client succeed. To learn how Bennett Thrasher can support you through this process, contact Chris Edwards by calling 770.396.2200.
Back to insightsNever miss an update. Sign up to receive our monthly newsletter to unlock our experts' insights.
Subscribe Now