Tip #150 The Importance of Transparency in the Sale of a Business


cartoon about transparency in the sale of a business

Due diligence (or the right of inspection) is an important part of the business sale process to get to closing. Sellers must disclose everything — and not just Tax Returns, Profit & Loss Statements and Balance sheets. They also must be able to support these documents with bank statements, check register, lease agreements and a whole list of items. This process not only verifies what the business owner is selling, but it also builds confidence for the buyer that this is a good fit for him or her. In addition, being totally transparent minimizes the possibility of any lawsuits claiming misrepresentation if the buyer doesn’t do well going forward. Read this Inc. article on due diligence.