Posted by Jonathan A. Patterson, CPA, CVA
There are many reasons that a business owner needs to have a business valuation performed. Often these include a merger or acquisition, divorce, estate planning, exit or succession planning, and shareholder or partner disputes. Whatever the reason, understanding the value of a company is essential for both immediate and long-term planning situations. While business valuations can be complex and use various methods for assessing value, the client preparation process can be quite straightforward. Regardless of who performs the valuation, there are a number of documents needed to assess the company structure, liquidity, assets, liabilities, and related obligations. Being prepared for the types and volume of documents needed makes the process easier for everyone involved. To help clients, prospects, and others understand what documentation may be asked of them, Belfint, Lyons & Shuman has provided a checklist below.
Business Valuation Documentation Checklist
- A brief history of the company
- Information on marketplace, company’s position, and any competitive advantages
- Organizational chart highlighting key positions and their responsibilities
- Copies of any contracts with top executives and managers
- Articles of incorporation, business tax identification numbers and related filings
- Copies of the company’s tax returns covering the last three to five years
- Financial statements of the company
- Documentation on any copyrights, patents, domain names, and other intellectual property
- Details pertaining to any real estate owned or leased by the business and corresponding documentation, including appraisal
- Details on the value of inventory or supplies owned
- Information on any machinery or other fixed assets owned by the company
- Details on pending or ended litigation in which the company is/was involved
- Information on monthly payroll obligations including the total number of employees and explanation of their functions
- List of vendors and suppliers
- Information on current customers or customer list including an accounts receivable report
- List of all business advisors including attorney, accountant and consultants with information on retainer or other agreements
A business valuation is a critical step needed by most owners to deal with an immediate issue or for planning purposes. For this reason it’s essential to work with an experienced firm to guide you through the process.
If you would like to discuss a valuation for your business or have questions, Belfint, Lyons & Shuman wants to help. For additional information please call us at 302.255.0600, or click here to contact us.