The Seller’s Library
Everything written down for owners selling a business.
Grouped by the question rather than the date, because you almost certainly arrived with one. Start with the section that matches where you are.
Preparation & diligence
What to fix before a buyer’s advisers start looking.
Your 1099 contractors are a price problem in diligence
Worker classification · 9 min read
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The rent you pay yourself is not the rent a buyer pays
Related-party leases · 9 min read
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Your ERC claim is open for six years, and buyers know
ERC exposure · 9 min read
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Unfiled sales tax returns never start the clock
Sales tax exposure · 8 min read
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The contractor who built your software still owns it
IP assignments · 9 min read
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Your cap table is the first thing diligence breaks
Cap table defects · 9 min read
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They found the problem in diligence and sued you anyway
Sandbagging · 9 min read
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Your disclosure schedules are the only document in the deal that shrinks your liability
Disclosure schedules · 9 min read
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Advisors & process
Who you hire, what they cost you, and how the process runs.
In a merger, the buyer inherits your privileged emails
Privilege at closing · 9 min read
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A standard NDA does not protect you from a competitor
NDAs and competitors · 9 min read
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Your broker may owe you no fiduciary duty at all
Who owes a duty · 9 min read
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Not every business broker may legally sell your stock
Broker registration · 9 min read
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Read the fee base and the tail before you sign the engagement letter
Advisor terms · 9 min read
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Letter of intent & leverage
Your leverage peaks here. Everything after is downhill.
What still binds you after the deal falls apart
When it dies · 9 min read
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When to let a buyer meet your employees and customers
Access covenants · 9 min read
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A promise to negotiate in good faith can be enforced
Good faith · 8 min read
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Exclusivity is the one term you give away for free
Exclusivity · 9 min read
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Check the buyer’s money before you sign the LOI
Proof of funds · 9 min read
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The price cut that arrives two weeks before closing, and what you can do about it in the LOI
Retrade · 10 min read
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Your letter of intent says it is non-binding. Several of its paragraphs are not.
Binding provisions · 10 min read
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Everything you do not settle in the letter of intent, you concede after you sign it
LOI economics · 9 min read
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Deal structure
Asset or stock, and what each one does to your proceeds.
The 401(k) must be terminated before closing, not on it.
Retirement plans · 9 min read
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In an asset sale, you terminate every employee at closing.
Employees at closing · 9 min read
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Your buyer will want the right to offset your seller note.
Seller note terms · 9 min read
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Part of your LLC sale is taxed as ordinary income.
LLC interests · 9 min read
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An F reorganization lets you sell units, not S corp stock.
F reorganization · 9 min read
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Licenses and permits set the closing date, not the parties
Licenses and permits · 9 min read
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An asset sale does not end your liability for the business you sold
Successor liability · 9 min read
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Every consent your deal needs is somebody’s chance to reprice you
Consents · 9 min read
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If you take a seller note, you are behind the bank — and the bank will put that in writing
Seller financing · 9 min read
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If your buyer is using an SBA loan, the program has already decided several of your deal terms
SBA 7(a) · 9 min read
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If you still own a C corporation, an asset sale gets taxed twice
Double tax · 9 min read
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The buyer wants an asset sale. Price it before you agree to it.
Asset vs. stock · 9 min read
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Purchase price
The mechanics that decide what actually reaches your account.
The wire you receive at closing is not the purchase price
Net proceeds · 9 min read
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Rollover equity is priced by the buyer, not by a market
Rollover equity · 9 min read
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Your earn-out is an unsecured claim against the buyer
Earn-out security · 9 min read
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An accountant, not a judge, decides your price true-up
True-up disputes · 9 min read
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The buyer will deduct your deferred revenue from the price
Deferred revenue · 9 min read
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Cash-free debt-free: what counts as debt is negotiable
Debt-like items · 9 min read
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Revenue or EBITDA: choosing the yardstick your earn-out is measured against
Earn-out metric · 9 min read
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After closing, the buyer runs the business your earn-out depends on
Earn-out covenants · 10 min read
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The allocation schedule decides your tax rate, not the headline price
Allocation · 9 min read
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The working capital peg is a second price negotiation.
Working capital · 10 min read
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Your add-backs will be audited. Here is which ones survive.
Add-backs · 9 min read
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Tax
Where the money goes before you see it.
Part of your earn-out will be taxed as interest
Earn-out taxation · 10 min read
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Your installment sale defers less tax than you think
Installment sales · 9 min read
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Moving states before a sale does not always move the tax
Residency and sourcing · 9 min read
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Your QSBS exclusion depends on when the stock was issued
QSBS exclusion · 9 min read
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The built-in gains tax runs five years from conversion
Built-in gains tax · 9 min read
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Diligence will test whether your S election is valid
S corp status · 9 min read
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The buyer wants a 338(h)(10) election. That is a price negotiation, not a formality.
Step-up elections · 9 min read
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After closing
The promises that outlive the sale.
Selling the business does not release your guarantees.
Guarantees you still owe · 9 min read
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Rep and warranty insurance exclusions come back to you.
Insurance vs escrow · 8 min read
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A defective claim notice can still cost you the escrow.
Claim notices · 9 min read
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Your post-closing role has limits you did not negotiate.
Staying on after closing · 9 min read
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One owner will speak for all of you after closing.
The seller representative · 9 min read
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Your non-solicit can bar customers who come to you.
Non-solicits after closing · 9 min read
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The non-compete you sign as a seller is not the one you signed as an employee
Restrictive covenants · 9 min read
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The fraud carve-out is the exception that swallows your cap
Fraud carve-out · 9 min read
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How much of your price the buyer keeps, and how long before you see it
Escrow · 9 min read
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Your cap is not your maximum exposure
Indemnity limits · 10 min read
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61 entries · a new one most days
