10 Issues Sellers Need to Review Prior to Listing

Complete an Internal Legal Review or Audit:

Is the Company in Good Standing; Confirm the company is in good standing (Illinois: https://www.ilsos.gov/corporatellc/) in all states where they do Business. If your business has a physical presence in an outside state, you are required to register for a “Certificate of Authority.” Failure to do so will cause the forfeiture of certain rights and may result in costly retroactive penalties.

Business Records: Having good records will help to eliminate an opportunity for prospective buyers to seek a reduction of the purchase price after a Letter of Intent (LOI) is executed.

Business and Professional Licenses:

• Check status of all required licenses.

  • If licenses are found to be not current -file for reinstatement

Employee Relations:

• Background and credit checks permissible with written consent.

• Workers must be properly classified as employees vs. independent contractors.

• I-9 immigration compliance for all current employees.

• Overtime pay required for all non-management employees

Appraisal of Business: Independent appraisal will educate seller about worth of business.

• Note- In our opinion, this is only relevant for those companies greater than $10mm in annual revenues.

Disclaimer: Business owners are highly encouraged to seek out professional legal representation prior to listing a business for sale.