- Legal Fees: This includes the cost of attorney for contract preparation and negotiation as the seller. If there is a lease transfer involved, typically, the seller may also be responsible for the landlord’s legal fees, which can sometimes be shared with the buyer.
- Business Brokerage Commission: If you complete the transaction through a broker, you will need to pay a brokerage fee.
- Advertising Expenses: If you decide to advertise and promote your business, you will incur upfront expenses such as advertising fees and costs for preparing business Information Memorandum.
- Accounting Fees: If the buyer requires additional documentation and support for due diligence, there may be associated accounting fees incurred by the seller.
- Inventory Appraisal Costs: If your business includes inventory, you may need to engage a third-party inventory appraisal company and pay fees based on a certain percentage of the inventory.
The following three items are the company’s liabilities and are not considered direct costs of selling the business. However, they must be paid before the business settled:
- Accounts Payable: Any outstanding payments to suppliers or landlords, including unpaid rent, must be settled before the transfer.
- Taxes: Various unpaid taxes may need to be paid before the business transfer is completed.
- Employee Expenses: Accrued employee vacation and other benefits, such as long-term service benefits, must be converted into monetary payments before the transfer takes place.”
