Aimee B. Davis Law P.C.

So You Want to Sell Your Business…What Steps Should You Take?

{3:30 minutes to read}

I’ve represented clients seeking to buy and sell small- and middle-market businesses for over 20 years. Often these clients are first-time sellers and/or buyers.


As one can imagine, first-time sellers can feel a certain way about parting with their baby. Because selling one’s business can be an emotional experience, I thought it would be helpful to lay out the basic steps to consider when entering into any Merger & Acquisition (M&A) transaction:

Step 1. Negotiate a Non-Disclosure Agreement (NDA)

A threshold issue in negotiating NDAs is agreeing to the survival period of the restrictive covenants. Sellers want them to run for as long as possible (even indefinitely), particularly in strategic sales. But in private equity deals, you see only one year covenants not to disclose confidential information because this seller typically isn’t engaged in the operations of the business. Also, I often negotiate the scope of the exceptions to confidentiality covenants.

Step 2. Negotiate a Letter of Intent (LOI)

In October 2017, I wrote an article questioning whether an LOI is necessary. In certain cases, I agree that entering into an LOI may be a helpful next step for first-time buyers and sellers to confirm they have a “meeting of the minds” regarding the basic deal terms. An LOI also provides a roadmap for negotiating the definitive purchase agreement (Definitive Agreement). There are fewer pages to digest, enabling the parties to focus on what they are actually agreeing to, and how onerous the process may be as they move into the due diligence phase.

Step 3. Conduct Due Diligence

In February 2016, I wrote an article entitled “What Does Due Diligence Bring to the Table?” There I stated that due diligence is a valuable, important and necessary component in every M&A transaction. Due diligence can be conducted either by the principals who are buying the business or with the assistance of the Buyer’s attorney. Even when representing sellers, I recommend conducting my own due diligence to gain a basic understanding of my client’s business. I find this necessary to the extent I will be involved in preparing schedules to the Definitive Agreement. These schedules set forth exceptions to the representations and warranties to be made by Seller. As such, I want to ensure the accuracy of the statements to be made by my client with respect to the business being sold.

Step 4. Negotiate the Definitive Agreement

If the parties have signed an LOI or if the deal is proceeding without one, the next step is drafting and negotiating the Definitive Agreement. Typically, Buyer’s counsel prepares the initial draft, and Seller’s counsel provides comments. This means that after reading the draft and discussing it with her client, Seller’s counsel will prepare a “mark up” or “redline” of the draft. There are several components to the Definitive Agreement, which will be discussed in future blogs, just to keep you all cliff hanging….

Aimee B. Davis Law P.C. is committed to advising its clients and resolving issues relating to the legal and business matters that are important to them. If you have any questions, please feel free to contact us at (917) 617-2243 or email

Aimee B. Davis

Aimee B. Davis Law P.C.

122 Ashland Place
Brooklyn, NY 11201