Many entrepreneurs and investors nationwide come to Florida to find businesses for sale. One of the most significant factors that drive many businessmen to relocate to Florida is the state’s favorable tax rates.
Furthermore, other factors like a massive influx of consumers and good weather year-round also contribute to the state’s pro-business environment.
In this article, you will discover the essential steps to sell a limited liability company (LLC) in Florida.
Benefits of Limited Liability Companies
Undoubtedly, the most sought-after advantage when someone purchases an LLC is asset protection and business flexibility. As limited liability companies are versatile by nature, they do not have the same restrictions as partnerships or corporations.
Accordingly, LLC owners are free to decide on aspects such as the number of members allowed, or category of members allowed (e.g., partnerships, trusts, individuals, etc.). Also, LLCs enjoy flexibility when structuring their company management process, as owners can choose different types of profit distribution.
Selling an LLC in Florida – Understanding the Process
Like any other transaction, it is impossible to sell an LLC or its assets if no one is willing to buy it. However, unlike some may think, there are other steps to follow before finding a buyer.
In this context, it is crucial to work with an expert business attorney to ensure the transaction will have a positive outcome. An expert business attorney in Florida will help throughout the process by:
- Drafting solid contracts to prevent future conflict and avoid liability risks
- Preparing a memorandum of understanding/term sheet containing all terms of sale before drafting the sales contract
- Helping to find other good professionals (e.g., business valuation expert), if necessary
- Ensuring full legal compliance at the state and federal level
- Providing valuable insights from the negotiation stage to the transaction’s closing
How do I Sell an LLC in Florida? – Step-by-Step
Identifying the Right Time to Sell
It is crucial to identify the right moment before selling a business. When someone is buying an LLC in Florida, he/she is either buying profits or buying potential for future profits. Hence, there are two indicators that the time is right for selling an LLC:
When the company is doing well, with a good track record in the period between six months to one year before the transaction
When there is an upswing in the market, as some business industries tend to get an increase in profitability in specific periods
Meeting Your Legal Advisor
If the time is right for selling an LLC, the next step is to sit down with an expert business attorney to talk about the company. During the conversation, it is fundamental to explore questions such as:
- Why do you want to sell your company?
- How many business partners are involved in the transaction?
- What are the assets under the company’s possession?
Proceeding with Detailed Business Analysis
Before putting an asking price for the business, you must proceed with a comprehensive analysis regarding the company’s entire situation.
During the analysis, take a look at the business’s financial statements, tangible assets, and discretionary earnings. Also, it is essential to consider the whole business operation to create a detailed marketing plan for potential buyers.
Putting the LLC for Sale
After creating a detailed marketing plan demonstrating all the benefits associated with the company, it is time to put the LLC for sale. At this stage, it is crucial to rely on your legal advisor to secure the results you want, either a better selling price, a rapid sales process, or even both.
Then, the next step is to proceed with a pre-selection stage to ensure prospective buyers have the financial requirements and interest to buy your company. After completing the shortlisting process, it is time to meet with the remaining buyers face-to-face.
Accepting an Offer and Proceeding with the Due Diligence
After meeting with qualified buyers, it is time to accept one of the offers. It is important to remember that prospective buyers need to submit a non-binding letter of intent to lay out the conditions included in the offer.
Once you have accepted an offer, it is possible to proceed with the due diligence to officially transfer ownership of the business. After having an expert business attorney review all the documents, you can sign the paperwork and complete the transaction.