When you sell a Florida corporation, the biggest decision is structure: does the buyer purchase your stock, or the corporation’s assets? That choice drives your tax bill, which liabilities you keep, and how much paperwork the deal needs. After that, a sale follows a predictable path: prepare, value, find a buyer, sign a letter of intent, survive due diligence, negotiate the purchase agreement, and close.
Start preparing 2-3 years before you want to sell. Most of what raises your price can’t be fixed in a few months.
How do you get the corporation ready to sell?
Buyers pay more for a company that’s organized, profitable and doesn’t need you every day.
Your financials. Have at least three years of audited or reviewed financial statements ready. Buyers will pick apart your revenue trends, margins and cash flow, and gaps or inconsistencies lower the price. Clean up the balance sheet too: collect receivables, write off bad debts, and get rid of obsolete inventory and equipment.
Your corporate records. Make sure the Florida paperwork is current:
- Every annual report filed with the Florida Division of Corporations
- Minutes of board and shareholder meetings, plus all corporate resolutions
- A stock ledger showing current ownership
- A Certificate of Status showing good standing
- Current registered agent information
A corporation that isn’t in good standing with Florida can delay or kill a sale, and it’s one of the easiest problems to fix ahead of time.
Your contracts and legal exposure. Go through every contract, lease, license and permit and note which ones can be transferred and which need third-party consent. A key customer, supplier or landlord contract that can’t be assigned can cut your value significantly. Resolve pending lawsuits and disputes where you can, because buyers will find them in due diligence and use them against you.
Your role. Show that the business runs without you. Write down your operating procedures, cross-train employees, and build up your management team.
Stock sale or asset sale: which is better for you?
| Factor | Stock sale | Asset sale |
|---|---|---|
| What the buyer gets | Your shares, so the whole corporation with its EIN, contracts and licenses | Specific assets: equipment, inventory, customer lists, IP, goodwill |
| Liabilities | Stay with the corporation, which the buyer now owns, known and unknown | Generally stay with you unless the buyer agrees to take them |
| Your taxes | Usually long-term capital gains | Mixed, with some assets taxed as ordinary income |
| Paperwork | Simpler, less documentation | More complex, with contracts often assigned or renegotiated one by one |
| Approvals | Every selling shareholder has to agree to sell | Shareholder vote on a sale of substantially all assets |
| Who prefers it | Sellers | Most buyers |
Buyers like asset sales because they get a stepped-up tax basis in what they buy and they don’t inherit unknown liabilities. They often offer less for stock. Asset sales also give you more flexibility to keep certain assets or liabilities, and transfer taxes may apply to some assets.
In practice, you’re negotiating structure and price together. If you own a C corporation, push hard for a stock sale. An asset sale can mean the corporation pays tax on the gain and then you pay again when the cash comes out to you, so a slightly lower price for stock can still leave you ahead.
What is your corporation worth?
There are three standard approaches.
Multiple of earnings. Most small and mid-sized deals are priced as a multiple of EBITDA (earnings before interest, taxes, depreciation and amortization). Typical multiples for small to mid-sized Florida corporations run 2x to 6x, depending on the industry. A corporation with $500,000 of annual EBITDA might sell for $1.5 million to $3 million, depending on industry, growth prospects and market conditions.
Discounted cash flow. This projects future cash flows and discounts them to present value at a risk-adjusted rate. It suits companies with stable, predictable cash flow and tends to be used for larger corporations or those with strong growth potential.
Asset-based. Fair market value of all assets minus liabilities. It fits asset-heavy businesses and liquidations, but for an operating company with real goodwill it usually gives the lowest number.
Consider getting a professional valuation from a certified valuation analyst before you talk to buyers. It typically costs $5,000 to $15,000 for a Florida corporation, and it gives you a defensible number and keeps your own expectations realistic. Overpricing is one of the most common ways sales stall.
Who buys corporations like yours?
Strategic buyers are competitors or companies in related industries. They often pay the most, because they can squeeze extra value out of the combination.
Financial buyers are private equity firms, investment groups and individual investors. They focus on returns, often offer lower prices, and may close faster.
Internal buyers are your managers or key employees. They know the business better than anyone, but they usually need seller financing because they don’t have much capital for a down payment.
To reach them, you can use a business broker, online business-for-sale marketplaces, industry trade associations, direct outreach to likely acquirers, or an investment banker for larger deals. Most sellers use a broker or intermediary, mainly to keep the sale confidential and to screen out tire-kickers.
How do you keep the sale confidential?
Word that you’re selling can rattle employees, worry customers and tip off competitors. Two tools help.
First, market the company with a blind profile: industry, general location, size and financial performance, with nothing that identifies you.
Second, require a signed non-disclosure agreement before you reveal your name, financials, operations or customer list. A solid NDA defines confidential information, limits its use to evaluating the purchase, bars the buyer from soliciting your employees and customers, requires return or destruction of documents if the deal dies, and runs for a set term (typically 2-3 years). Have your attorney prepare or review it. Don’t send anything sensitive without one.
What’s in a letter of intent?
Before the definitive purchase agreement, most deals start with a letter of intent (LOI) covering:
- Purchase price and payment structure
- Stock or asset sale
- Estimated closing date
- The due diligence period and conditions
- Confidentiality
- Exclusivity, usually 30-90 days during which you can’t negotiate with anyone else
- Contingencies such as financing or landlord consent
Most of an LOI isn’t binding, except the confidentiality and exclusivity provisions. That exclusivity is the catch. Once you sign, you’re tied to that buyer for the whole period, so get the terms that matter to you into the LOI instead of hoping to win them later. Have your attorney review it before you sign.
What happens in due diligence?
Expect 30 to 90 days of the buyer going through everything:
- Financial statements, 3-5 years of tax returns, and accounting records
- Customer and supplier contracts
- Employee agreements, compensation and benefit plans
- Intellectual property registrations and licenses
- Real estate leases or deeds
- Litigation history and pending claims
- Environmental compliance, if relevant
- Insurance policies and claims history
- Corporate governance documents
- Regulatory licenses and permits
The buyer will also want to interview key employees, tour your facilities, and (with your permission) meet major customers.
Put everything in a secure virtual data room before you go to market, and answer requests quickly. Slow answers look like hidden problems. Disclose weaknesses up front, too. A problem the buyer finds on its own becomes a reason to cut the price or walk away.
What do you negotiate besides price?
The headline number is only part of the deal. Pay as much attention to these:
Purchase price allocation. In an asset sale, how the price is split across asset categories changes your tax bill. Buyers want more allocated to depreciable assets. You want more treated as capital gain.
Representations and warranties. You’ll make many statements about the company’s condition, finances and compliance. Negotiate their scope and how long they survive after closing.
Indemnification. This decides who pays for problems discovered after closing. Negotiate a cap on your exposure (typically 10-25% of the purchase price) and a basket, or deductible, before indemnity applies.
Escrow. Many deals hold back 5-15% of the price in escrow for 12-24 months to back your indemnity, released if no claims arise.
Earnouts. Part of the price gets paid later based on future results. They bridge valuation gaps but cause disputes, especially once you no longer control the business.
Working capital adjustments. Most deals adjust the price if working capital at closing differs from a target. Pin down the definitions and calculation early.
Seller financing. Many Florida corporation sales include a seller note for 10-30% of the price. It shows you believe in the business, but you’re now a creditor taking collection risk.
How is the sale taxed?
Talk to a CPA or tax attorney before you agree on structure. These are the basics.
Stock sales. Gain on stock held more than a year is long-term capital gain, taxed federally at 0%, 15% or 20% depending on income, plus the 3.8% net investment income tax for high earners. Florida has no state income tax, so Florida sellers don’t pay state tax on that gain, a real advantage over sellers in states like California or New York.
Asset sales. Each category of asset is taxed its own way:
| Asset | Federal treatment |
|---|---|
| Inventory and receivables | Ordinary income (up to 37%) |
| Depreciable equipment | Depreciation recapture at ordinary rates, then capital gain |
| Real property | Section 1231 gain, typically at capital gains rates |
| Goodwill and intangibles | Capital gains rates |
| Non-compete payments | Ordinary income |
Buyer and seller have to agree on the allocation and report it on Form 8594 (Asset Acquisition Statement). If the two filings don’t match, expect IRS scrutiny.
S corp or C corp. An S corporation passes income through, so on a stock sale you generally pay tax once at capital gains rates. A C corporation faces potential double tax on an asset sale: the corporation owes tax on the gain, and shareholders pay again on distributions. For a C corporation, a stock sale is almost always better on taxes.
Who has to approve the sale?
It depends on the structure. Under Florida Statutes Chapter 607, a sale of substantially all of the corporation’s assets needs approval from a majority of the outstanding shares entitled to vote. In a stock sale, the corporation doesn’t approve anything. Each shareholder decides whether to sell their own shares.
Check your articles and bylaws early. They may set a higher threshold, such as two-thirds or unanimous consent, or give certain shareholders a veto.
Minority shareholders matter more in a stock sale. In an asset sale, the majority usually controls the decision. In a stock sale, a holdout can block or delay the deal unless a buy-sell agreement or similar provision deals with it. If you have minority owners and no such agreement, fix that before you start talking to buyers.
What happens at closing?
Expect to sign some combination of:
- The stock purchase agreement or asset purchase agreement
- A bill of sale (asset sales)
- An assignment and assumption agreement
- Stock certificates and stock powers (stock sales)
- A closing certificate confirming your representations and warranties
- Non-compete and non-solicitation agreements
- A transition services agreement, if you’re helping after the sale
- A promissory note and security agreement, if you’re financing part of the price
- An employment or consulting agreement, if you’re staying on
Closings happen at either attorney’s office or remotely. Funds should arrive by wire. Don’t accept a check for a transaction this size. You’ll hand over the signed documents, stock certificates or title documents, corporate records, keys, passwords, and anything else the agreement lists.
What’s left to do after closing?
Honor the non-compete. Most deals bar you from competing or hiring away employees for a set period (typically 2-5 years) in a defined area. Florida courts enforce reasonable non-competes, and a violation can mean an injunction, damages and lost earnout payments.
Help with the transition. Many buyers want you around for 30 to 180 days to introduce customers, train management or finish projects. Put the scope, time commitment and pay in the purchase agreement.
Dissolve the shell after an asset sale. If you sold assets, the corporation still exists, holding the cash. Notify creditors and settle what’s left, pay final taxes and file final returns, distribute the remaining cash to shareholders, close the bank accounts and cancel licenses, and file Articles of Dissolution with the Florida Division of Corporations. Otherwise you’ll keep paying annual report fees and registered agent costs for an empty company.
Report the sale. Report it on your personal returns, or on the corporate return for a C corporation, file Form 8594 if it was an asset sale, and keep the deal records for at least seven years.
What mistakes cost sellers the most?
- Starting too late. Selling because you’re burned out leaves no time to fix what lowers the price.
- Pricing on emotion. An inflated asking price wastes months on buyers who won’t close.
- Messy books. Nothing cuts offers faster than financials a buyer can’t trust.
- Leaving taxes until the end. By then the structure is set. Model both stock and asset scenarios with a tax professional before you sign the LOI.
- Chasing the headline price. A higher number with an uncapped indemnity, a large escrow and a long earnout can be worth less than a lower clean offer.
- Going it alone. A business sale needs an experienced attorney and CPA at minimum, plus a broker or investment banker for many deals.
If you’re a year or more from selling, the best use of that time is boring: get three years of reviewed financials, get your Sunbiz records and minute book current, and make yourself less necessary to daily operations. Those three things move your price more than anything you’ll negotiate at the table.