When to Disclose Financial Records - VR Business Sales Blog

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Wednesday, April 22, 2009

When to Disclose Financial Records

Peter King
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Just as you would not want your personal financial documents made available to the public, business owners only want serious buyers to have access to information such as their accounting books and records. Disclosure of such information does not occur until much further into the selling process, depending upon the progress. Even when such information is brought out into the open, the party in question will have signed a non-disclosure agreement.
We here at VR will provide you with summary information including gross sales, lease information and cash flow. We will assist you in drafting an offer based on that information, and protect you by making the offer contingent on your satisfaction with that data upon full due diligence. 
A business offer to purchase simply says, “If everything I assume about this business proves true, this is what I am willing to do.” You, the purchaser, then have the right to proceed, withdraw your offer or make a new offer based on your investigation. The seller, once he has accepted your offer, must stand by those terms unless you and you alone choose to alter them.


Response to: When to Disclose Financial Records
Cody Brumer says
I always do an audit annually of my financial records as most of my contemporaries do as well. It's surprising that there are a few out there that don't keep good books. In addition, businesses are obligated to do that comes from the Companies Acts.

Response to: When to Disclose Financial Records
Ann Rogers says
Inevitably, you have to disclose your records if you are going to be selling your business. I find that some businesses that I was looking to buy wouldn't disclose even as we were nearing a deal because they had something to hide. Keeping good records gives a clear and accurate look at the business, and it will only help you determine where you need to be if you want to sell as some end up leaving a mess.

Response to: When to Disclose Financial Records
Sam Price says
I always organize and keep records available. One never knows when opportunity might knock, even though I am not looking to sell my business yet. If and when it does knock, you have to be ready. I've seen a lot of people that I know not be ready with their records, and that's usually what delays disclosing.

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