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How to Prepare Before Looking for Buyers: The Importance of a Clean and Complete Company Record
As a business owner, one of the most monumental decisions you will face is whether to sell your company.
But before you meet with buyers, you need to get your company in tiptop shape.
The key to a successful sale is preparation, and one of the most overlooked areas of preparation is making sure that your company records are complete, up-to-date, and “clean.”
This is where a competent Corporate Service Provider and a proficient Company Secretary come in.
Table Of Content
Why Preparation Matters When Selling Your Business?
If buyers want to set up new business, they will conduct a very thorough due diligence to determine value and any risk. If a buyer spots any discrepancies, missing records or compliance issues, their view of the business — and the offer they will put forward — can be significantly colored.
For example:
- Incomplete financial records might lead a buyer to question the accuracy of your revenue figures.
- The existence of pending legal cases can be a red flag for some measures of potential liabilities.
- There are risks involved with old compliance filings ridden with regulations.
Any of these issues can raise red flags that lead the buyers to reconsider their valuation or increase the level of renegotiation — or in the worst-case scenario, walk away from the deal.
The Role of a Corporate Service Provider in Preparing Your Company for Sale
The Corporate Service Provider (CSP) has a critical role in preparing a business for sale. They provide a comprehensive range of services including helping you in auditing your business books, identifying instances of non-compliance, and handling outstanding issues, among others. That is how they add value:
- Auditing Records: A CSP audits all intellectual property documents, contracts, and financial statements to verify that are correct and in order.
- Dealing with Compliance Matters: Is your annual return overdue or tax balance unpaid? A CSP can make the corrective action in no time.
- Providing Objective Assessments: They identify areas that need improvement and guide you through necessary steps.
For instance, a CSP such as VIVOS can pay your accountant to make any outstanding tax payments if your company has any. This builds confidence for prospective buyers but also streamlines the due diligence process later.
The Importance of a Competent Company Secretary
Though Corporate Service Providers Singapore concern themselves with other aspects of preparation, a Company Secretary services is especially experienced in managing your company’s internal paperwork. They’re most crucial in selling a company because they help ensure that:
- Statutory Filings: Current shareholders register, a filing of annual returns and minutes of the board of directors.
- Documentation of compliance: Third-party intellectual property rights and licenses, as well as permits, are appropriately documented.
- Handover of the Business: Properly drafted shareholder resolutions and agreements authorising the sale.
At VIVOS, our team of expert Company Secretaries services specialises in helping businesses undergoing mergers and acquisitions. We understand the intricacies of preparing a company for sale and can assist with everything from updating shareholder registers to drafting resolutions that authorise the sale.
Steps to Prepare Your Company for Sale
If you’re considering selling your company, here are some practical steps to take:
1. Audit Financial Records:
Ensure financial statements are accurate, up-to-date, and free of errors. Consider hiring an external auditor for verification.
2. Review Legal Documents:
Check that all contracts, licenses, and agreements are valid and enforceable.
3. Address Compliance Issues:
Resolve any outstanding compliance issues, such as missed filings or unpaid taxes.
4. Organise Documentation:
Create a digital repository for all important documents, including financial records, legal agreements, and operational manuals.
5. Seek Professional Advice:
Work with a Corporate Service Provider and a Company Secretary to ensure your company is fully prepared for sale.
Preparing your company for sale is not just about finding a buyer—it’s about ensuring that your business is in its best possible shape to maximize value and attract serious investors. A clean and complete company record can make the difference between a seamless transaction and a deal falling through.
With the expertise of a Corporate advisory Services Provider (CSP) and a Company Secretary, you can confidently navigate compliance, documentation, and due diligence, ensuring a smooth and profitable sale.
If you’re considering selling your business, don’t leave your company records to chance—take proactive steps today to ensure a successful transition.
Schedule a Free Consultation
Our expert team will help you navigate due diligence, resolve compliance issues, and maximize your company’s value before the sale.
Most Popular
Frequently
Asked Questions
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Why do company records matter when selling a business?
Buyers conduct thorough due diligence before making an offer. Missing records, compliance gaps, or financial discrepancies can delay or derail a sale.
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How does a Corporate Service Provider help prepare for a sale?
A CSP audits records, ensures compliance and addresses outstanding issues to streamline the due diligence process and enhance your company’s credibility.
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What role does a Company Secretary play in the selling process?
A Company Secretary services ensures statutory filings, proper documentation of compliance, and smooth handover procedures to facilitate a legally sound transaction.
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What are common red flags that buyers look for?
Incomplete financial records, pending legal cases, overdue tax payments, and outdated compliance filings are common issues that can lower a company’s valuation or jeopardise a sale.
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