By Jeffrey D. Solomon, CPA, CVA

Too many times when a company transaction or sale commences we find that the management team  has not devoted adequate time getting their “ house”  in order and a mad scramble ensues that can have  unwelcome delays to  the sales process.  When you start your business you should have the end in mind at the outset. This means, as a consequence, that you need to maintain records and protocols to ensure a smooth transition. We find too much time is taken many years later trying to unravel issues that could have been dealt with easily and expediently if they had been addressed up front.

The list below are just some items that you should thinking about several years before a transaction

Do you have all stock certificate, option agreements and employee contracts that are signed?

Is the cap table up to date? Is it clear and precise?

Have you assessed that all filing requirements, both federally and state, are being complied with? This would include subcontractor/employee  assessments and  state nexus issues including sales tax exposure.

Do you have all customer contracts in place? Are they standardized? Are they signed?

Do you have company policies documented? Is there an accounting manual?

Do you have copies of all tax filings?

Do you have documented accounting policies that the accounting team follows?

Is all IP protected and do you have the patents to prove it?

Do you have audited or reviewed financial statements that are in compliance with generally accepted accounting policies issued by the FASB and the AICPA?

Have you both signed nondisclosure agreements on both sides of the potential deal?

At KN+S we work with companies dozens of times a year that are going through transitions and we can offer a great deal of assistance during this process. Feel free to reach out to us at 781-453-8700 as you begin this endeavor or want to discuss in more detail.