Tax Preparedness in a Sale of a Private Company

I recently had the opportunity to participate in a webcast with four amazing experts on the topic of Business and Tax Preparedness in a Sale of a Private Company.  My fellow experts, Louis Vlahos, Cynthia Romano, Vanita Spaulding and Alex Kasdan were specialists in investment banking, business valuation, restructuring and process improvement and tax law – I was asked on as the corporate law expert.

The focus of the program was how to maximize the value of your business in a sale context.  What was amazing to me was the remarkable underlying consistency of all of the experts in one key area – the time to start preparing for a sale is long before an offer comes along.

Each expert, from the tax lawyer to the process improvement expert was convinced that the only real way to maximize your businesses value was to conduct your business with the ultimate end goal – a transition – in mind.  Whether you are planning to sell your business today or not, there’s a good chance that you’ll get an unsolicited offer in the future – and the future might be sooner than you think.  So it’s critical to ensure that your business is ready to transact, even if you don’t have present plans.  For certain issues, like tax elections, the IRS might look back five years or more in time before deciding whether to honor your election.  For other critical items – like succession planning and talent development – you’ll need a long time to train your team to be ready to run your business.  And from a corporate law perspective, you certainly want to avoid contracts that might pay dividends today, but lock you into a bad deal for the future when a potential buyer comes along.

How then, can you make your company completely “transaction ready”?  While tax preparedness certainly plays a part, that’s a much longer question than we have time for here. There are a number of things to consider and explore.  So, watch out for an upcoming article with some ideas on how to get started with that. In the meantime, you can check out the full webcast here.

You can also contact us with any questions you may have. Our office phone number is 920-996-0000 or you can email us here.