Key Documents You'll Encounter When Selling Your Business
Key Takeaways
- A business sale involves a stack of legal documents, and most sellers see them for the first time during their deal
- The LOI and the purchase agreement are the two most important; everything else flows from them
- Understanding what each document does before you're staring at it under time pressure reduces mistakes
- Never sign anything without understanding what you're agreeing to
One of the things that catches first-time sellers off guard is the volume of paperwork involved in a business sale. Here's a plain-English walkthrough of what you'll encounter.
Confidentiality Agreement (NDA)
Before a buyer gets any real information about your business, they sign an NDA. This prevents them from sharing your financials, customer lists, or operational details. Pay attention to duration, scope of what's considered confidential, and any non-solicitation provisions.
Confidential Information Memorandum (CIM)
This is the document your M&A advisor prepares to market your business to qualified buyers — a detailed overview of financials, operations, customer relationships, and growth opportunities. Your first impression with serious buyers.
Letter of Intent (LOI)
The LOI outlines the key terms of the proposed transaction — purchase price, deal structure, exclusivity period, and conditions to closing. LOIs are typically non-binding on price but include a binding exclusivity clause. Do not sign without your M&A advisor and attorney reviewing it carefully.
Due Diligence Request List
After the LOI is signed, the buyer sends a detailed list of documents they need — financial records, tax returns, customer contracts, employee agreements, leases, insurance policies, and more. Being organized here matters.
Purchase Agreement
The final binding contract. It defines exactly what's being sold, the purchase price, how it's paid, and what representations and warranties the seller is making. Have an M&A-experienced lawyer review this — not just a general business attorney.
Closing Documents
Bill of sale, assignment agreements, employment agreements if you're staying on, and non-compete agreements. Understand the scope of your non-compete before you sign — geography, time period, and what counts as competing.
We walk every client through the document process before the first buyer call. No surprises.
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