Feb. 7, 2024 – Small businesses are often described as the backbone of the U.S. economy, with purpose and structures too varied to list. To a business owner, a small business is more than a paycheck. Their business can be immensely personal, and the sale of it can bring charged emotions even in the best situations.
To help guide your client through the sale of their small business or to help with selling or closing your solo or small firm practice, it’s helpful to start with some basic checklists and tested procedures.
Securities, Mergers, and Acquisitions in Wisconsin (State Bar of Wisconsin PINNACLE®) includes a chapter on buying and selling small businesses. Intended as an overview of some but not all issues that may arise in a business sale, this chapter goes over purchase options, employee matters, insurance, document reviews, and more. A fillable checklist rounds out the chapter.
Warrens Forms of Agreements (Lexis) is a helpful source for unpacking the sales transaction or transformation of a business. In volume two, find commentary on the different options a buyer and seller may explore for a successful transaction. Get model forms for nondisclosure and noncompete, asset purchase, and stock purchase agreements.
The Small Business Administration includes several tools on their website to help support small businesses, including a quick introduction to
closing or selling a business. This short and easy-to-read checklist is a great overview to help a client to get started.
Geared toward the nonlawyer, Nolo’s
Legal Guide for Starting & Running a Small Business examines the sale of a business from the buyer’s perspective, as well as the owner's, with discussion of how to approach a financially troubled business.
The rabbit hole of special topics that could come up during a business sale is long and winding. From the type of entity being sold, to assets and tax liability, transferring a business interest is often a complicated affair. Use these overviews and checklists to organize the information you have, and determine what information you still need to discover.
Agency Information
Turn to agencies for guidance and frequently asked questions.
For a quick start, the Wisconsin Department of Revenue offers guidance on closing a business and evaluating sales tax in business or business asset sales. The IRS offers guidance on closing a sole proprietorship and offers a guide to selling small businesses, with referrals to longer overviews on specific topics.
In Wisconsin, many small businesses are registered with the Wisconsin Department of Financial Institutions. The website hosts
business entity forms, frequently asked questions on
business filing and information changes, and
trademark registration.
Many businesses employ more people than a single owner. The Wisconsin Department of Workforce Development provides information on
business transfers for unemployment insurance, as well as a wealth of information about employee rights and workplace safety.
Special Topics
Taxes are a big concern when selling a business. In addition to the agency information above, use tax research sources to guide your client.
CCH AnswerConnect is a database available to attorneys with a Wisconsin State Law Library card. This one-stop search includes tax articles by topic, with information for Wisconsin and federal law. Popular CCH tax research sources in this database include
Wisconsin Tax Reporterand Inheritance, Estate and Gift Tax Reporter.
Part of an estate plan or probate proceeding may include the sale of a business. For business owners who anticipate a future transfer of ownership, books like
The Lawyer’s Guide to Family Business Succession Planning (American Bar Association) can help by offering broad overviews of the issues, and suggestions for everything from choice of entity to successful payment arrangements.
Eckhardt’s Workbook for Wisconsin Estate Planners (PINNACLE) approaches closely held business planning from the formation of the business all the way to post-mortem tax planning. This book includes sample agreements, as well as practical examinations of marital property laws, inheritance, and insurance.
Finding Forms
Selling a business is replete with paperwork. Sample agreements, contracts, and other related forms can be found in a variety of sources.
Contract Law in Wisconsin (PINNACLE) is a two-volume set that examines contract law and provides drafting guidelines. Other model contract language or complete sample contracts can be found in several types of sources – both online and in books. Large form sets like
Warren’s Forms of Agreements (available as a Lexis Digital
e-book through the State Law Library) or
West’s Legal Forms provide rich ground for researchers, with a variety of sample contracts or contract clauses.
Narrowly focused books are also great sources to find examples for specific legal issues, like
Covenants Not to Compete. Many other samples can be found in large legal databases, like Westlaw or Lexis.
The ABA’s Contract Drafting: Powerful Prose in Transactional Practice is a quick read, focusing on writing clear contracts. The book also provides some samples.
Advising the Small Business: Forms and Advice for the Legal Practitioner includes several sample forms, including asset purchase agreements and attorney representation templates, letters, and checklists.
Search for Liens and Liabilities
A previous
InsideTrack article,
Researching Private and Public Businesses, Specialized Industries (2022), introduced strategies for uncovering financial filings and industry data. Search financial filings and court records to build a clear picture of the business’s liabilities and history. Industry review can help form a better picture of the value of business services and assets.
CLE Programs
PINNACLE offers a variety of CLE programs with information about selling a business, including your law firm. You can
use this link to get the current listing. Programs currently include
Advising the Closely Held Business: What Could Possibly Go Wrong? and
Practical Considerations for Closing a Law Firm 2022. If it is your own firm you plan to close, the CLE program
Law Firm Succession Planning 2022 may be useful.
Where to Get Research Help
Ask a librarian for help to find information about leases, taxes, employment law, or other issues that arise during your review of a business.
Law librarians are available at these Wisconsin libraries:
For information about accessing specialized business research databases, contact a business library:
