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ABA Family Legal Guide

Forming and Operating a Small Business

Franchising and Buying a Business

Buying a Business

What is the selling prospectus?

If you are working with a business broker, your first detailed look at a business for sale will be something called a selling prospectus. You may not learn the name of the business in this document--sellers often want to maintain confidentiality, so that their customers and business contacts don't know the business is for sale. However, you will find out about

  • the basic story of the business, including its history and current status, location, assets, operations, competition, and profit-and-loss picture;
  • the role of the owner, including the part the owner plays in day-to-day operations and his/her role in making the operation successful;
  • the owner's reasons for selling;
  • at least a summary of the business's finances; and
  • the asking price and terms.
    • American Bar Association Family Legal Guide
    Copyright © 2004 American Bar Association
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