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Selling Your Business or Commercial Real Estate?
Correctly Pricing the Business is Most Crucial for its Timely Sale
Are you thinking of selling your business or commercial real estate? When you work with our team, we can provide guidance in properly positioning your business to attract an appropriate price in a timely manner; identifying tax saving options; evaluating assets versus shares sale; and preparing of financial statements and cash flow projections.
HOW WE ADD VALUE FOR OUR SELLER CLIENTS
Properly positioning your business to attract an appropriate price in a timely manner
Identifying tax saving options
Evaluating assets versus shares sale
Preparing of financial statements and cash flow projections
Providing effective legal support
HOW WE GET YOUR BUSINESS READY TO SELL
Helping you in the pre-sale restructuring: It is wise to start planning for a sale before starting the selling process. This is to maximize the after-tax value generated by the sale by planning in advance to get your business into the best position to sell. Where possible we usually recommend reviewing your circumstances before the sale.
Estate freeze: Estate freezes are essential strategies for owners of privately held businesses with substantial retained earnings and low adjusted cost bases. This strategy freezes the amount of taxable capital gain in a business owner’s estate. After a properly structured freeze, any further growth in the company’s value accrues not to the principal shareholder, but to his or her successors or (more commonly) to a discretionary trust set up as part of the freeze.
Helping you plan your taxes: Understanding your personal and corporate tax situation may also help you recognize your options about the deal structure.
Depending on your business valuation, you may end-up paying hundreds of thousands of dollars in taxes. The good news is that it can be prevented by planning your exit strategy early in the game. In doing so, you can greatly reduce the amount of taxes you pay on the sale, or even sell your business tax-free.
Mainly two approaches to selling your business: There are generally two ways to sell your business, share sale or asset sale. The tax consequences are very different for both methods.
Share Sale: When selling shares any gain will likely be a capital gain, one-half of which will be subject to tax. Depending on the circumstances, the owners of those shares may be able to utilize their Lifetime Capital Gains Exemption (LCGE). The LCGE allows individuals to realize the first approximately $850,000 of any gain tax-free on the sale of Qualified Small Business Corporation (QSBC) shares. To be considered a QSBC and eligible for the LCGE, the company must meet the required criteria. In some cases, the assets restructuring, or purification is required two years prior to the sale.
Asset/business Sale by a company: The company selling the business assets will have taxable income including, recapture of capital cost allowance (CCA) on the sale of depreciable assets; capital gains on other capital properties, such as land and capital gains on goodwill.
The taxes payable by you will depend on the gains realized and the way in which amounts are distributed to you (repayment of debt, return of capital, bonus, taxable dividends, capital dividends). Capital gains realized by the company will enable it to pay tax-free capital dividends to you on the tax-free portion of the capital gains realized.
Helping you to get your books in order: Buyers generally require at least three years of financial information. The quality of your financial statements, and availability of past tax returns can impact the confidence of a potential buyer and make the due diligence easier.
Helping you develop a management succession plan: Your business sale and its value are highly dependent on how vital you are to your business. A very important consideration for a buyer is that if he/she would be able to effectively run the business after you leave? To increase your business value, you should have a succession plan in place or create processes so that the business can operate without you.
HOW WE SELL YOUR BUSINESS
Business valuation: Using your business's market position, financial situation, strengths and weaknesses, we provide you with a realistic and objective business value assessment. Depending on the nature of a business, we use EBIDTA multiple, comparative business analysis or discounted cashflow methods.
We assess the true profitability of your business by eliminating variety of non-operational expenses and infrequent expenses incurred during the past years to calculate recurring cash flow.
Preparing business profile and confidential information memorandum (CIM): Using the key operational and financial information of your business we prepare your business profile or CIM. This information is then provided to the qualified potential buyers after they sign the nondisclosure agreement (NDA). We generally refrain from using and providing any confidential and proprietary information about a company until a buyer submits a letter of intent to purchase the business and starts his/her due diligence.
Conducting an organized marketing campaign: We undertake a custom-tailored and focused marketing approach for each business using our network of thousands of potential buyers in several business categories.
Accepting offers and negotiating letter of intent (LOI): After selection of the preferred buyer by you, we assist in negotiating the terms and conditions of the LOI on your behalf. We also receive and hold the deposits on your behalf in our trust account until the closing date or as mutually agreed between you and the buyer.
Assisting through the negotiation of sale and purchase agreement (SPA): After satisfactory completion of the due diligence, SPA is the final document outlining the final terms and conditions of the transaction. This is generally written by the lawyers from both sides and we assist in negotiating and its mutual agreement by you and the buyer before the closing date.
Please contact us via phone or send us your information by filling the form on this page and we will get back to you at the earliest.