Selling Your Business

PagnatoKarp has assisted over 70 business owners through their liquidity events and pre-sale planning processes. As True Fiduciaries™, we adhere to strict practices that place your interests first every step of the way.

We guide you through the pre-sale process, helping to identify and avoid potential roadblocks. We coordinate your advisory team to focus on efficient execution to help you reach your goals for financial independence.

10 Tips Before Selling Your Business

  1. Determine If A Sale Meets Your Cash Flow Needs. Each of the more than 70 times – without exception – we have assisted a client through a liquidity event, the client has experienced a need of 20% more cash flow than originally expected due to additional leisure time for travel, vacation and other luxury items. Before concluding that a sale will satisfy your future cash flow needs, take the time to identify your anticipated needs, add 20% and then decide if you’re ready to sell.
  2. Prepare The Business For Sale. Do your due diligence: make sure your books are in order, implement good internal control measures, and ensure all business paid expenses are in fact for the business rather than personal. Your buyer will examine to see if this is done so it is better to be ready before they start their due diligence.
  3. Start Tax Planning Early. Depending on how your company is structured when it is sold – LLC, C-Corp., S-Corp. – and what state it resides, you could experience different tax implications. Early in the process, the wealth creator should meet with a tax expert to ensure the corporate structure is set up to be most tax advantageous and determine if a change of residency is warranted.
  4. Conduct Safe Cybersecurity Practices. It is vital for entrepreneurs to educate themselves and their children on safe cybersecurity practices including password protection and proper use of social media. Be very cautious about what you share and with whom.
  5. Consider Gifting Strategies. The gift of ownership in a closely held business offers an extremely favorable valuation opportunity where an owner can maximize annual gift tax exemptions and use of their lifetime exemption which is currently scheduled to increase to $5.45 million in 2017. If you anticipate receiving sufficient proceeds to afford gifting, be certain to make your transfers before you receive any letters of intent.
  6. Conduct Dynastic Planning. Outline how much money you want your children to receive, at what ages, and under what circumstances. With larger estates, consider using trusts to benefit your children and more remote descendants so they will not be taxed on the money remaining in trust at their deaths.
  7. Protect You And Your Family From Creditors And Predators. You just sold your company. That means you and your family are now targets. Structure your assets to ensure a layer of protection from creditors by placing them in asset protection vehicles such as irrevocable trusts, limited partnerships or limited liability companies. With the average divorce rate at 50%, these vehicles may be structured so your wealth stays within the family bloodline.
  8. Author A Family Mission Statement. Successful planning starts with defining your family mission statement. This is critical for articulating the family values the wealth creator would like disseminated to the next generation and beyond. Plan for yourself, and your family, so they understand how the wealth should be used and to what purpose.
  9. Educate Your Family. Most entrepreneurs want to assist family and friends, however you need to be careful of creating a sense of entitlement. Education for you and your family members is critically important. Entrepreneurs need to set proper expectations and also put in place the proper vehicles where family and friends cannot access the wealth inappropriately.
  10. Examine Titling Of All Assets. All assets must be properly titled and transferred into the proper trusts. If assets are not titled properly, no amount of estate planning in the world will be enough to protect your assets for future generations.


PagnatoKarp has helped over 70 entrepreneurs sell their businesses. We focus on tax savings, cash flow strategies, estate planning and risk management — before, during, and after the sale of a business.

  • Case Study: Pre-Liquidity
  • Case Study: Liquidity
  • Case Study: Family Office
Client Case Study #1: Pre-Liquidity
Client Case Study #2: LiquidityClient Case Study #3: Family Office
Family Office Legal
Family Office Taxes