How to Sell a Closely Held C Corporation

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Step 1

Determine how you want to structure the sale of your business and how you will find a buyer. The type of buyer for your business will greatly impact the structure of how you sell your business. If you plan to sell your business to a competitor, you will likely demand a higher price and a share purchase agreement. However, if you plan to sell your business to a family member, you'll likely look for a lower selling price and use an asset purchase agreement. Work with legal and tax advisors to develop an effective selling strategy.

Step 2

Determine your asking price and its allocation. The asking price will be greatly determined based on whom you are marketing the business sale to. Competitors will likely buy you out for more than an investor will. Some buyers are willing to pay a higher purchase price based on the amount of purchase price that is allocated to goodwill, otherwise known as the sweat equity, versus assets, or the actual book value of the business equipment, due to the tax implications.

Step 3

Negotiate the sale. Be prepared for buyers to bring you offers for less than your asking price. Also, consider offering to finance a portion of the sale yourself. Many business sales will happen more quickly when the owner offers private financing.

Step 4

Execute the appropriate legal documents. Once a deal is made conceptually, a purchase agreement must be signed. The business terms of the purchase agreement should be pre-negotiated, and the legal conditions of the agreement are typically handled by attorneys.

Step 5

Transfer the stock certificates. If you sell the shares of the C Corporation as opposed to simply the assets of the business (asset sales are more common), you'll need to also transfer the corporate record book and record the share transaction.



About the Author

Kelcey Lehrich has been writing for several online media outlets for the past few years. His work can be found on, and Lehrich holds a bachelor's degree from Cleveland State University in business administration and finance.

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