If you've used an accountant regularly to prepare your tax returns and draw up financial statements, he or she will be very well acquainted with the financial shape of your business. This knowledge may be helpful during the due diligence process.
Your accountant will also be essential in drawing up the historical and projected financial statements and other data required to place a benchmark value on your business, and in gathering and organising financial data that will be requested by the buyer during the due diligence phase of negotiations.
If you haven't been in the habit of getting audited financial statements, we strongly suggest that you do so now.
It is absolutely essential that at least one of the members of your team be an expert in dealing with the tax aspects of business sales and acquisitions. This person may be your accountant, your lawyer, or you may also decide to hire a specialist solely for this purpose.
Depending on how the deal is structured by the lawyers, you may face an enormous tax bill upon the sale of your business, or next to none. There are a lot of opportunities to save money here.
Taking advantage of tax-saving opportunities requires planning in advance of signing the sales documents. We suggest that you start talking to such an adviser 4-6 months before a deal is expected.
