Fundamental Documents You'll Need For The Sale Of Your Business

One of the biggest steps in selling your business is getting your documentation in order. While this guide focuses on businesses producing $500,000 to $5,000,000 in annual sales, most of what's here applies to businesses of different sizes as well.

When you have your documents organized and ready to go, it does two things: it validates your asking price and keeps the sales process moving. These same documents help determine your business value early on, and buyers will request them during due diligence.

The reality is that most business owners don't have all of these documents ready when they start thinking about selling. But the more you can gather and organize, the smoother the process will be and the stronger your position in negotiations.

Think of this as an ourline rather than a set of hard requirements. Here's what you should work toward gathering:

Types of Documents

• Financial Documents

• Legal Documents

• Business Operation Documents

• HR/Employee Documents

Financial Documents

Clean, organized financial records are one of the most important parts of preparing to sell. Good financial documents support your asking price and help you spot weaknesses or growth opportunities you might have missed.

If you work with a business broker, they'll need specific documents to value your business:

• The last three years of tax returns

• Current balance sheet

• Previous three years of P&Ls (Income Statements)

• Year-to-date P&Ls (Income Statements)

During due diligence, expect requests for additional financial documents:

• Cash Flow Statements – Shows cash inflow and outflow over time

• Accounts Receivable Aging – Not just outstanding invoices, but the quality of your A/R and how quickly customers pay

• Aging Reports – Details on outstanding invoices and debts

• Customer Credit History – If applicable, demonstrates reliable payment behavior

• Sales Reports – Historical data on sales trends

• Key Customer Concentration – If a significant portion of revenue comes from one or two customers, buyers need to know

• Fixed Asset Register – List of equipment, vehicles, and other physical assets with depreciation schedules

• Inventory Valuation – Detailed inventory list with quantities, costs, and estimated market values

• Supporting Documents for Discretionary Adjustments – Breakdowns of personal expenses in the financials, like owner's salary, perks (car, travel), and non-cash items (depreciation)

• Debt Schedules – Clear breakdown of all outstanding debt, payment schedules, and whether it transfers or gets paid off at closing

• Tax Liabilities or Disputes – Any ongoing audits or tax issues that could become the buyer's problem

This isn't everything. You'll also want to gather credit agreements, outstanding loan documents, and other financial records as you prepare.

Professionally prepared financial statements from a CPA can strengthen your numbers and potentially increase your asking price. A CPA can guide you through this process.

Legal Documents

Legal documents typically get reviewed during due diligence. Buyers and their advisors want to understand your legal obligations and responsibilities.

• Lease Agreements – Building and equipment leases that a buyer would likely take over

• Real Estate Records – If you own your property, ownership will transfer at closing

• Business Registration Documents – How your business is registered, plus any government licenses or permits that need to be transferred

• Intellectual Property Rights – Copyrights, patents, domain names, logos, trademarks

• Partnership Agreements – If applicable, showing ownership and operational structures

• Supplier and Vendor Contracts – Terms and conditions, including pricing, delivery schedules, and payment terms

• Business Licenses and Permits – Proof you're compliant with local, state, and federal regulations

• Insurance Policies – What coverage you have, claims history, and whether policies are transferable

• Litigation History – Any past or pending lawsuits, settlements, or legal disputes

• Non-Compete and Confidentiality Agreements – Both for you as the seller and for key employees

Business Operation Documents

These documents show how your business actually runs day-to-day. Buyers need this to understand what they're stepping into.

• Business Plan – Your company's objectives and goals, giving buyers a clear picture of operations

• Customer List – An organized list of existing customers is valuable because it lets buyers hit the ground running instead of building from scratch

• Key Vendor and Customer Relationships – Who manages these relationships, and how transferable are they to a new owner

• Sales Playbook – Your sales process and marketing plan laid out in detail

• Operating Manuals – Standard operating procedures documented

• Supplier Information and Contracts – Buyers want to know who your suppliers are and where they'll source materials

• Technology and Software Systems – What systems run the business, who owns the licenses, subscription details, and any integrations

• Facility Condition Reports – If applicable, especially important for manufacturing, retail, or businesses with significant physical assets

• Organizational Chart – Who does what, reporting structures, and any key person dependencies

HR/Employee Documents

Employee contracts and company culture are part of what you're selling. Since buyers usually consider your team to be one of your most valuable assets, they need to understand the employment situation.

• Employee Information – List of current employees with hire dates and salaries

• Employment Contracts – Any existing contracts that need to be maintained

• Employee Handbook – Shows expectations and company culture

• Payroll Company Agreements – Include agreements with current payroll service providers

• Employee Benefit Plans – What benefits you offer and what needs to be maintained or changed

• Key Employee Retention – Information on critical team members and any retention agreements or incentives in place

Transition Planning Documents

Buyers want to know what happens after the sale closes. Having these items ready shows you've thought through the handoff:

• Transition and Training Plan – How long you'll stay to help with the transition and what the handoff process looks like

• Knowledge Transfer Documentation – Critical information that exists in your head or key employees' heads that needs to be documented

• Post-Closing Support Agreement – Terms for your availability after closing for questions and guidance

  
  

Next Steps - Fundamental Documents You'll Need For The Sale Of Your Business

Creating an exit plan and getting your documentation organized can feel overwhelming, especially when you're still running your business day-to-day. If you're not sure where to start, what you're missing, or how to prioritize what matters most for your situation, we can help.

We work with business owners in the 1-3 year runway to sale, helping them identify gaps, get their records in order, and position their business for the best possible outcome.

Contact us for a consultation. We'll review where you are now and create a clear plan for what needs to happen next.