Selling Your US Business: A Step-by-Step Guide

Deciding to sell a US small business is often a major milestone, representing years of hard work and dedication. While it’s an exciting time, it’s also one of the most complex financial and legal processes you’ll ever undertake. Without a clear strategy, a lower sale price or legal headaches could become a reality. The right professional accounting services in the US can make all the difference. This guide is designed to help you navigate the process.

1. Getting Your House in Order

Before you even start looking for a buyer, you must prepare your business for sale. Think of this as getting a house ready for a showing—you want it to look its best, and all documents should be in order.

• Clean Up Your Books: Prospective buyers will perform a deep dive into your financials. Therefore, you must ensure your records are immaculate, consistent, and up-to-date. This process includes at least three to five years of profit and loss statements, balance sheets, and tax returns.
• Get a Professional Valuation: Don’t guess your business’s worth. A professional valuation provides a realistic and defensible asking price, which helps you avoid overpricing and scaring off potential buyers. Professional appraisers, for instance, use several methods, including:
  • Market-Based: This involves comparing your business to similar companies that have recently sold.
  • Income-Based: This method analyzes your business’s future earning potential.
  • Asset-Based: This involves valuing the business based on the sum of its assets.

2. Assemble Your Expert Team

You can’t do this alone. As a matter of fact, assembling a team of trusted professionals is one of the most important steps in the sale process.

• Your Accountant or CPA: Your accountant is your most valuable asset during a sale. They will help prepare your financial statements for buyer review and provide a realistic valuation.
• Your Business Broker: A broker is the market expert. They will confidentially market your business to a network of qualified buyers, screen inquiries, and manage the complex negotiation process.
• Your Attorney: An attorney will handle the legal side of the transaction.

✅ Still doing accounting the old way? Your competitors aren’t. Counto’s AI handles the boring stuff while experienced accountants ensure everything’s perfect. See the future of accounting here.

3. Understand the Key Documents You’ll Need

Once a buyer shows interest, you’ll enter the most intense phase of the sale. This is when the legal and tax forms come into play.

• Legal Documents:
  • Non-Disclosure Agreement (NDA): Before you share any sensitive information about your business, the buyer must sign an NDA to protect your confidential data.
  • Letter of Intent (LOI): The buyer will present a non-binding LOI that outlines the key terms of the proposed deal, including the purchase price, payment structure, and a timeline for due diligence.
  • Purchase Agreement: This is the final and most important document. It is a legally binding contract that details every aspect of the sale, from the assets being sold to the closing conditions.
• IRS Tax Forms: The specific forms you need to file depend on your sale’s structure.
  • Form 8594, Asset Acquisition Statement: In an asset sale, both the buyer and seller must file this form to report the allocation of the purchase price to the various assets being sold (e.g., equipment, inventory, goodwill). The amounts reported by both parties must be identical.
  • Form 4797, Sales of Business Property: You will use this form to report gains and losses from the sale of business property, including depreciable assets. In addition, this form helps determine whether the sale results in a gain or loss, and it’s used to calculate depreciation recapture, which is taxed as ordinary income.
  • Schedule D, Capital Gains and Losses: If you have a net gain from Form 4797, that amount is typically carried over to Schedule D. Furthermore, this form is used to report capital gains from a stock sale of a C-Corp.
  • Form 6252, Installment Sale Income: If payments are received in a year following the sale, you must report the sale using this form.

4. What You Need to Know

The structure of your sale is not just a detail—it’s the single biggest factor affecting how much money you walk away with. This is where your accountant’s expertise becomes priceless.

• Asset Sale: In an asset sale, the buyer purchases the specific assets of the business (e.g., equipment, inventory, customer list), not the business entity itself. The seller’s business entity retains the liabilities. For the seller, the proceeds are allocated among the assets, with each taxed differently.
• Stock Sale: Conversely, in a stock sale, the buyer purchases the entire business entity by acquiring your shares or membership interest. Consequently, the buyer assumes all assets and liabilities. The profit from the sale, for the seller, is typically taxed as a capital gain, which is often at a lower rate than ordinary income.

Summary

Selling a US small business is a monumental task that requires a proactive approach. By following a clear, step-by-step process and building the right team, you can take control of the transaction and set yourself up for future financial success. Preparation is everything—get your financial house in order and invest in a professional valuation to justify your asking price. You need an accountant, a lawyer, and a business broker to handle the financial, legal, and transactional complexities. Familiarize yourself with the key legal and tax forms, especially the critical IRS forms like 8594 and 4797, to ensure a compliant sale.

Your Next-Level Accounting Team: AI That Learns + Experts Who Care

Tired of Teaching Every New Accountant About Your Business? Traditional accounting services mean repeatedly explaining your business to new staff. Modern companies need systems that learn and remember—exactly what most accounting firms can’t deliver.

Counto’s intelligent accounting service adapts to your business. Our AI learns your specific patterns and transactions, then handles your daily bookkeeping automatically. Expert accountants review everything for accuracy, and your dedicated Customer Success Manager is always just a message or call away. No more repeated explanations, no more basic questions—just accounting that understands your business.

Join small businesses saving hours monthly on financial management with our outsourced accounting solution. Plus, with our AI handling the routine work, you’ll get better insights at a fraction of the cost of a full-time bookkeeper. Ready to upgrade your accounting? Chat with us now, email [email protected], or use our contact form.

Here are some articles you might find helpful 

Smart Rules Benefits US Small Business

Rules Corporate Tax Filing

Smart Rules Save Time Automation US Small Business

Smart Rules Replace Accountant

Automate Bookkeeping Smart Rules US Business