How to sell a business: steps, timeline and taxes (2026)

How to sell a business: the steps

Before you list the business, check what its records are worth. AI developers now pay for the operational records companies already keep, such as support tickets, work orders, email and chat archives and code (public deals), and that value rarely shows up in an offer for the business, because buyers price earnings. A free valuation takes six questions about the business and no files.

Most sales follow the same order, whether the business is a shop, a practice or a software company. The SBA and business.gov.au publish government outlines; the sections below add the exit options, timeline, fees, tax and the records.

Source: SBA: Close or sell your business

Exit strategy options: sell, buy out, pass on or close

An exit strategy is the owner's plan for leaving the business. BDC splits the paths into an external sale (to a competitor, supplier or client, a private equity firm or another entrepreneur) and an internal transfer (to a family member, existing management or employees). A full exit is not the only option: owners can sell a partial stake or move into an advisory role first.

• Closing instead of selling? Follow the closing a business checklist or how to liquidate a business, and see selling company data after closing for what the records can still earn.
• Selling a startup to a company that mainly wants the team? Compare the options in acquihire vs selling startup data.

Source: BDC: Many entrepreneurs are ready to pass the torch, but few are prepared (Aug 2026)

Business succession planning for a family business

Succession planning means choosing and preparing the next owner well before you leave. Entrepreneurs expect it to take two years on average, but a full transition often spans three to five years, according to BDC. In an internal transfer the work is mentoring, skills development and progressive delegation before the formal handover, and the main concern is identifying a successor who is both ready and willing to take the reins.

• Get a valuation report. In a family succession or management buyout it helps the discussions about the sale and later dealings with tax authorities (BDC).
• Plan the tax early. In the US, transferring a family business may bring estate and gift tax obligations (SBA). In Canada, a transfer of qualified small business corporation shares to a corporation controlled by the owner's adult children is an intergenerational business transfer, elected on Form T2066 (CRA). In the UK, Business Asset Disposal Relief needs its conditions met for at least 2 years up to the sale (GOV.UK).
• Put it in writing. Refer to your succession plan when you decide to sell (business.gov.au), and expect buyers to ask for any buy-sell agreement between owners (SCORE).
• Decide your role afterwards. Vendor financing, an earn-out, a phased transfer or a role as executive, board member or adviser keep you involved; a clean break can cost some of the price, because buyers may insist on a reduced price if you cut all ties (BDC).

Source: BDC: Many entrepreneurs are ready to pass the torch, but few are prepared (Aug 2026)

How long does it take to sell a company?

SCORE puts a typical sale at 6 to 18 months from the decision to sell through closing day. Deal size matters. In the Market Pulse survey for the second quarter of 2026, reported by SCORE, Main Street deals, generally under $2 million, averaged six to 10 months from engagement to close, and lower middle market deals 11 to 12 months. Timelines grew longer that quarter.

• How to sell a business fast: an outright sale transfers ownership immediately and pays you right away (SBA), and organized records and realistic terms keep your part of the timeline moving (SCORE). Approach the likeliest buyers directly, such as managers, competitors or suppliers, and expect to give up some price for speed.
• What slows a sale: higher interest rates, slower approval of acquisition loans (SCORE) and missing documents; a deal can stall over a missing lease consent (SCORE).
• If no buyer appears, liquidating the assets is the fallback, usually as a last resort (SBA).

Source: SCORE: Seller's guide to the business sale process, LOI through closing (Oct 2026)

How to value a business before you sell it

Set a value before you market the business. The SBA lists three methods: the income approach (projected revenue, adjusted for risk), the market approach (what similar businesses recently sold for) and the asset approach (assets minus liabilities). Count every asset, including intangibles such as brand presence, intellectual property and customer information.

A valuator's report strengthens your hand in negotiation, but fair market value is not necessarily the price: market conditions, the buyer's strategic interests, due diligence, financing and how involved you stay after the sale all move it, BDC notes. Multiples by size and industry, SDE vs EBITDA and how to choose a valuator are in what is my business worth. The licensing value of the company's records is a separate number; see the records step below.

Source: SBA: Close or sell your business

Preparing a business for sale: financials, contracts and the data room

Buyers will ask to see historic and interim financial statements, projections, tax returns and other records, and the business should not rely on your presence to keep functioning (BDC). Fix what you can before you go to market:

• Financials: review them with your accountant so records are up to date, interim statements accurate and projections realistic (BDC).
• Operations: document standard operating procedures, deal with customer or supplier concentration and fill gaps in the management team (BDC).
• Contracts and leases: list each material contract with its end date and any consent needed to transfer it. Look for assignment clauses and change-of-control clauses, and ask landlords early, because consent can take time (SCORE).
• Intellectual property: confirm that the business, not you or an outside developer, owns its code, content and trademarks, and that domain names and social media accounts are registered to the business (SCORE).
• Employees and permits: check worker classification, employment agreements, benefit plans and payroll records, and list every licence and permit with its renewal date. Some cannot transfer, so the buyer may need its own (SCORE).

Source: SCORE: Legal due diligence checklist for business sellers (Oct 2026)

Finding a buyer: business broker, selling it yourself or listing online

Start with who the ideal buyer is: a family member, a group of employees or an outside buyer (BDC). A strategic buyer, such as a competitor or a company in your value chain, will often pay more because it sees synergies. Then choose how to reach buyers:

• Ask serious buyers to sign a nondisclosure agreement before you send financial statements.
• Agree in writing what a broker's fee covers, when it is due and whether it applies if you find the buyer yourself.

Source: BDC: How to sell your business

Asset sale or share sale: what changes for the seller

In a stock or share sale the buyer buys the owner's shares, and the company's liabilities come with it; in an asset sale the buyer buys the business's assets. Buyers of small businesses often prefer asset sales (SCORE). The choice changes the tax, the consents you need and what happens to staff and records; asset sale vs stock sale has the detail.

Source: SCORE: Seller's guide to the business sale process, LOI through closing (Oct 2026)

Tax consequences of selling a business: US, UK, Canada, Australia and India

Tax depends on the country, the structure and how long you have owned the business. Rates and thresholds change, so confirm them for your sale date with an accountant.

• United States. In an asset sale buyer and seller allocate the price by the residual method, which sets the seller's gain on each asset and how much is goodwill (IRS), and a corporation generally recognizes gain or loss on a liquidating sale of its assets. Paid over time? Under the installment method you include in income each year only the part of the gain you receive, but you cannot use it for inventory, and depreciation recapture is taxed in the year of sale (IRS). Selling stock of a privately held C corporation to an ESOP can defer the gain if, among other conditions, the plan owns at least 30% after the sale, you have held the shares at least 3 years and you buy qualified replacement property within the replacement period (26 U.S.C. 1042).
• United Kingdom. Sole traders and partners can qualify for Business Asset Disposal Relief if, for at least 2 years up to the sale, they have been a sole trader or partner and owned the business. Shareholders generally need to have been, for at least 2 years, an employee or office holder of a trading company in which they hold at least 5% of the shares and voting rights; shares from an EMI scheme have their own rules (GOV.UK). From 6 April 2026 the relief rate matches the basic-rate CGT rate of 18%, so it saves tax mainly on gains that would otherwise be taxed at 24%. Business Asset Disposal Relief is not available where employee ownership trust relief is claimed (HMRC). The full rules are in Business Asset Disposal Relief.
• Canada. Shares qualify only if, at the time of sale, the company is a small business corporation, with 90% or more of the fair market value of its assets used mainly in an active business carried on primarily in Canada; more than 50% must have been for the 24 months before, and no one outside you and related persons can have owned the shares in that time (CRA).
• Australia. The 15-year exemption needs 15 years of continuous ownership and an owner who is 55 or older and retiring, or permanently incapacitated (ATO). The retirement exemption has a $500,000 lifetime limit per individual, and if you are under 55 the exempt amount must be paid into a complying super fund or retirement savings account (ATO). The $6 million net asset limit is not indexed. The ATO notes that capital gains tax changes announced in the 2026–27 Federal Budget do not apply to Tax Time 2026, so check how they affect your sale date.
• India. The Income-tax Act, 2025 came into force on 1 April 2026 and repealed the Income-tax Act, 1961 (Gazette of India; as amended by the Finance Act, 2026). The slump sale rule that was section 50B of the 1961 Act now sits in section 77, under the same heading: special provision for computation of capital gains in case of slump sale. The fair market value of the undertaking, calculated as prescribed, is treated as the sale consideration. Shares listed in India are short-term if held 12 months or less; other shares, 24 months or less (section 2(101)). The repeal does not affect the previous operation of the 1961 Act (section 536).

Source: IRS: Sale of a business

Due diligence: from letter of intent to closing

Once a buyer is interested, the sale runs through four stages: the letter of intent, due diligence, the definitive purchase agreement, and closing and transition (SCORE).

• Disclose known issues in the disclosure schedule; it is usually safer than leaving them out (SCORE). That includes any data license the business has granted.
• If the buyer uses an SBA loan, earnouts generally aren't allowed when the loan finances a full purchase, and SBA rules can limit when a seller note is paid and how long you stay involved (SCORE).
• Keep running the business well: buyers may review recent monthly results again before closing, and a drop in sales can lower the price (SCORE).

Source: SCORE: Seller's guide to the business sale process, LOI through closing (Oct 2026)

Before you hand the records to a buyer, check what they are worth

Due diligence is when the company's records start to leave your control. The buyer's team asks for exports from the systems that run the business, and in an asset sale the agreement decides whether those records transfer at all. Decide what happens to them first.

The records can be worth money on their own. AI developers license operational records such as support tickets, work orders, email and chat archives and code: AI labs are buying data from dead startups to train their models, MIT Technology Review reported in October 2026, and Fast Company that shuttered startups are selling old Slack chats and emails to AI companies. A business buyer prices earnings, so that value rarely appears in the offer. Checking it takes minutes: see what your company's records are worth from six questions, with no files or system access.

• Choose one of three routes: let the records go with the business, carve them out as an excluded asset or retained right in the purchase agreement, or license a de-identified copy before signing and disclose it to the buyer. After closing, the records usually belong to the buyer. Licensing company data when you sell your business covers timing, who receives the fee and the privacy rules.
• Share as little personal data as due diligence needs. Describe the records at company level first: systems, years and volumes. In Australia, comply with the Australian Privacy Principles when you disclose employee, customer or supplier information to potential buyers (business.gov.au), and settle in the sales agreement the level of access the buyer has to your information (SBA).
• De-identify before anything is licensed. Suppliers scrub personally identifiable information and exclude HR records, according to MIT Technology Review; see how to de-identify company data.
• List what you hold with the data inventory template: the systems, the years covered and the approximate volume.

Source: MIT Technology Review: AI labs buying data from dead startups (Oct 2026)

How to sell a small business

The steps are the same at any size, but a small business sale leans harder on the owner. Buyers look for a business that does not rely on your presence (BDC), and they pay with their own capital, seller financing, SBA-guaranteed bank loans or commercial bank loans (SCORE).

• Make the sales agreement complete: list all inventory in the sale with the names of the seller, buyer and business, note adjustments and broker fees, leave out no assets or liabilities, and have an attorney review it (SBA).
• Pick the transfer type: an outright sale (ownership transfers and you are paid right away), a gradual sale (a monthly income from a buyer who cannot pay up front) or a lease of the business (SBA).
• Expect a deposit. In Australia it is usually 10% of the sale price (business.gov.au).
• Selling a franchise: review the franchise agreement for restrictions, transfer fees and any right of first refusal (SCORE).
• Selling a professional practice: see medical and dental practice valuation, and for accounting and law practices, the confidentiality rules in licensing data when you sell.

Source: SBA: Close or sell your business

How to sell an online business

An online business is usually sold as assets: the domain, the website and its code, content, customer and email lists, supplier relationships and the accounts it trades through. Most of the buyer's checks are about whether the business owns each one and can transfer it.

• Ownership: domain names and social media accounts should be registered to the business, not to you personally, and written agreements with developers and contractors should assign the code to the business (SCORE).
• Platform accounts: read each marketplace, payment and advertising platform's terms on transferring an account before you promise it to a buyer.
• Customer data: check what your privacy policy promised before a customer list changes hands; licensing data when you sell explains how privacy law treats a transfer to the buyer and a license to anyone else.
• Listings: business-for-sale websites suit smaller companies, but check the site's reliability and its confidentiality procedures first (BDC).
• Code and support history: a software business's repositories and tickets can interest AI developers too; see selling source code.

Source: SCORE: Legal due diligence checklist for business sellers (Oct 2026)

Selling a business in the UK, Canada, Australia or India

The steps above apply everywhere. These are the local rules that catch sellers out; tax is in the table above.

• Closing rather than selling? Follow the checklist for where the company is registered: the UK, Canada, Australia or India.

Source: business.gov.au: Sell your business

Next step

Write down the exit you want and when, have the business valued, and build the data room before you list. Decide what happens to the company's records before due diligence starts; the records valuation takes six questions and no files.

Origin Data Partners is independent and is not affiliated with any AI data buyer. We help owners compare buyers and find the best fit for their records. See what your data is worth.