Full disclosure is a concept that is applied to many areas of life, including real estate, vehicle sales, and business deals. Providing full disclosure is seen as a trustworthy act, even if it is required by law in many places. Here at Tampa Business Brokers Inc, we encourage all parties to the deal to engage in the best practice of full disclosure. This prevents future problems, including cancellation of the sale or even a lawsuit for breach of contract.
Full disclosure on all issues, problems, needed repairs, etc. should be made during the discovery stage of the business sale. Full disclosures in business transactions often include the following four sections:
- Business conditions
Everything about the business and its condition should be included in this section, including:
- Prior court orders or judgments
- History of bankruptcy or financial problems
- Promises to employees or vendors
- Maintenance issues
- Equipment needs
- Landlord information
- Anticipated cost increases for the next year
With good recordkeeping, it’s easy to locate all the required business condition information for a full disclosure document.
The regulations section focuses on required licenses, permits, zoning, taxes, and laws that apply to your business sale.
- Other considerations
External issues that might affect your business include:
- Protests and labor strikes
- Union agreements
- Pending litigation
- Existing leases
- Unresolved insurance claims
This section will vary widely from business to business and should be a thorough picture of any issue that may affect the business in the near future.
Anything you think may be important for a potential buyer to know that is not included in the previous three sections should be included here. Again, this section will vary widely from business to business, and should never appear pre-formed or copied from another deal.
If you are looking to sell your Tampa area business and need a dependable business broker to help with the sale, consider the professionals here at Tampa Business Brokers Inc.. Since 2003 we’ve helped Tampa area business owners with all their sales, negotiations, and marketing needs. We require all parties to make full disclosures so business deals are smooth and disruption-free. Visit www.tampabusinessbroker.com/contact-us/ to see how we can help you sell your business quickly and for the highest profit.