| We are often asked by both Buyers and Sellers if they will need an attorney or accountant in a business sale or if my firm, providing intermediary services will handle all of the documentation. The answer is that business transfers are complex and require the use of multi-professional disciplines. Additionally, there is the issue of conflicts of interest. In this month’s article, I will address the roles of some of the professionals that we often see in a transaction. |
ACCOUNTANTS- For Sellers, the accountant will play a key role in preparing the business to go to market. It is essential to have timely, accurate, and properly formatted financial data in order to value a business and prepare marketing materials, including the Confidential Information Memorandum (“CIM”). The Seller’s accountant will also assist with tax planning and Due Diligence.
- For Buyers, the accountant will verify the accuracy of the Seller’s financial data, assist the Buyer in tax planning, and often times populate a new entity formed by the Buyer, for the purpose of acquiring the business with the appropriate financial template.
ATTORNEYS- For Sellers, the attorney will make sure that the Seller’s entity is in order, all old liens have been removed, advise the Seller relating to the documentation of the sale, and assist the Seller in closing out the Seller’s entity, if applicable after the sale.
- For Buyers, the attorney will often generate the LOI and purchase documents, including the Asset or Stock Purchase Agreement, be involved with Due Diligence, financing, and closing matters.
OTHER PROFESSIONALS- Depending on the transaction there may other professionals involved such as insurance, real estate, and financial planning.
| If a Buyer or Seller does not already have an existing profession relationship, we typically will advise them to find a professional in that field with business transfer experience. Our team will provide a list of professional referrals, if requested. In our opinion, it is critical that the Buyer or Seller be comfortable communicating with the advisor and that the advisor responds in a time appropriate manner. For many Buyers and Sellers this may be the most significant financial transaction of their lives. You may have noticed that I did not mention Business Intermediaries in the list of professionals. At the risk of being biased, I believe that the Intermediary plays the most critical role in the process as he or she should coordinate the process and to achieve the best end result. Similar to selecting other professional advisors, the client should trust and be comfortable with the Intermediary. One of the non-economic benefits of my profession are the referrals and repeat business that we enjoy. Earlier this week, I met with a new client that was referred to us by his father, who used our services a number of years ago. Then, as I was creating this article, I received a call from a business owner that purchased his business in a transaction that we brokered many years ago. The relationships developed over the transaction process has come full circle in these cases, and many others. We can’t ask for stronger testimonials. Please feel free to contact us, if you believe that we can assist you. The majority of our business comes from referrals, and we look forward to working with you. 
Ronald V. Chernak President Inspiring business relationships since 1982! P.S. Nearly 26 years ago, our firm partnered with the leadership at UCCS to create an annual presentation providing relevant economic data to the Southern Colorado business community. From an initial luncheon at The Broadmoor that was attended by approximately 200 participants 25 years ago the event has evolved and had approximately 1200 virtual attendees in 2020. The event will be virtual again in 2021 and is free. Please note the registration link here . 
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