When preparing to exit your business, most owners focus first on financials and taxes. But just as important—and often more complex—are the legal considerations that must be addressed to ensure a smooth and successful transition.
As a CPA who advises small business owners on exit strategies, I’ve seen firsthand how the right team of professionals can make all the difference. While I handle the financial and tax aspects of the exit, I always encourage my clients to bring in legal counsel and other key advisors early in the process. Together, we help business owners navigate the full spectrum of issues involved in leaving a business with confidence and clarity.
Here’s what that legal landscape typically includes:
Ownership Agreements and Buy-Sell Clauses
If your business has partners, shareholders, or investors, reviewing your buy-sell agreement and any other governing documents is fundamental. These agreements dictate:
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Who can buy your ownership stake
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How the business will be valued
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What happens in cases of retirement, death, or disability
Your legal counsel plays a critical role here—ensuring these documents are current, enforceable, and aligned with your exit goals. As your CPA, I help evaluate how the terms impact your tax position and financial outcomes.
Client and Vendor Contracts
Buyers will closely examine your existing contracts. Working with your attorney, we can review:
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Whether key contracts are transferable or require consent
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Any exclusivity or non-compete clauses that may limit a sale
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Whether payment terms and obligations are clearly outlined
I also work with clients to forecast cash flow based on contract terms—helping you demonstrate consistent, predictable revenue to potential buyers.
Regulatory Compliance and Licensing
Failing to maintain proper licensing or compliance can delay—or derail—a business sale. Depending on your industry, this might include:
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Business licenses and operating permits
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Environmental or health compliance
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Federal and state regulatory filings
Legal experts will help you interpret requirements, while I help ensure your financial records reflect compliance—especially in industries like healthcare, construction, or food service.
Intellectual Property and Asset Protection
If your business owns trademarks, copyrights, patents, or proprietary systems, legal protection is key. Your legal team can ensure these assets are:
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Registered and enforceable
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Assigned properly to the business (not just to you individually)
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Transferrable to a buyer
Meanwhile, I help document their value and contribution to your overall business worth—an important component of any valuation.
Employment Law and Staff Transition Planning
Transitions affect teams. Together with your HR or employment attorney, we’ll review:
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Employment agreements and obligations
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Non-disclosure or non-compete clauses
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Benefit liabilities and severance considerations
From my side, I help quantify liabilities like accrued vacation or deferred compensation so you can address them before they become a sticking point in negotiations.
Tax and Deal Structure Strategy
Legal and financial issues often go hand-in-hand—especially when deciding between an asset sale and a stock sale. Together with your attorney, I help you evaluate:
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How to structure the sale for optimal tax efficiency
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What your post-sale net proceeds will be after taxes and fees
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Whether a reorganization or estate planning strategy is appropriate in advance of the sale
This kind of collaboration ensures you make informed decisions—minimizing surprises and maximizing value.
Why a Team Approach Matters
Planning a business exit isn’t a solo task. It requires the combined insight of:
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A CPA, to ensure clean financials and effective tax planning
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A business attorney, to handle contracts, compliance, and negotiations
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Key advisors, like M&A consultants, financial planners, or valuation experts
When these professionals collaborate, they create a clear, comprehensive plan that protects your interests and appeals to buyers. No single advisor can manage it all—but together, we can help you exit with confidence.
Final Thoughts
Your exit is one of the most important financial transactions of your life. Getting the legal aspects right is just as critical as the financial ones. As your CPA, I’m here to ensure the numbers support your goals—and to work in tandem with legal and other advisors to give you a full, 360-degree plan.
Thinking about selling or stepping away from your business? Let’s talk about assembling the right team to get you there.
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This article was written with the aid of artificial intelligence and reviewed for accuracy and clarity.