End-of-Year Transactions & Preparation

As is always the case in the 4th Quarter, our team sees a lot of “year-end” transactions that cause business owners to feel like they’re racing to the finish line. Sometimes, people are waiting as late as December 15th to start their year-end transaction. That is a recipe for disaster.  Likewise, closing a transaction on December 31st can be an important issue. Sometimes, certain benefits may expire at year-end (e.g., taxes). Other times, it can provide a significant administrative convenience to the parties (e.g., not having to make additional tax filings or deferring taxes to a subsequent year).

Be sure to plan ahead to meet your deadline and leave ample time to dot the ‘I’s, and cross the ‘T’s. Here are a few things to keep in mind now to help you plan for the end of the year.

Buy/Sell Transactions

If you’re considering buying or selling a businesses, or are already in conversations to do so, it’s important to know what priority items to focus on. Transactions of this nature can take a significant amount of time. A purchase or sale of a company between $1-$5M, on average, takes about 75 days from the beginning of the LOI to the closing date. For a sale of a company for more than $5M, the average time can vary significantly and range from from 30 days to 120+ days.


Organizational Structure

If you’re making material changes to the structure of your company, ask yourself:

  • Are you adding new partners?
  • Are you changing the composition of ownership among the partner?
  • Are you changing the manner in which the company is taxed?

If you answered ‘yes’ to any of the above questions, these are all the types of material changes where a year-end transaction may make a lot of sense.


Revisit Your Business Plan & Align (or Realign) Goals

If it has been a while since you’ve examined your business plan, now is the time to review it to make sure it’s aligned with your current company goals. Once you’ve revisited your business plan, consider whether operational changes are needed and whether related documents, policies, or agreements need to change to reflect that.


Get Prepared

We can help you plan ahead and so you’re not racing to the finish line. If our team can assist you as you prepare for end-of-year, please be sure to contact us.

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