Informing the buyer of your business
- KVK Editors
- Background
- Edited 1 May 2026
- 2 min
- Selling and takeovers
- Finance
When you sell your business, it is important that you give the buyer correct and full information. This prevents discussion during negotiations and after the transfer. You should set out company details, such as your financial situation or legal matters, in a memorandum of sale.
As a seller, you have a duty to disclose information. A sales memorandum provides a seriously interested buyer with an insight into the value of your business.
Sign a nondisclosure agreement (NDA)
Only provide seriously interested buyers with a sales memorandum and have them sign a nondisclosure agreement (NDA) first. This is because the sales memorandum contains a lot of confidential information about your business. Get help from an expert when drawing up a sales memorandum.
What do you include in the memorandum of sale?Â
In the memorandum of sale, you describe the history of your business, the reason why you are selling the business, the organisational structure, and the financial situation.
- Summary of the memorandum
Here, in 1 to 2 pages, you explain what your business does, how it is performing financially, and why your business is of interest to a buyer. This section appears at the start of your memorandum, but you should write it last. - Business profile
Here, you describe your business’s history, background, legal structure, ownership, and business structure and culture. - Products and services
In this section, you describe the products and services you offer, your revenue model, and what sets your business apart from competitors. - Market and competition
Who is your target audience, what market trends are emerging, and who are your main competitors? This information helps a buyer assess whether there are opportunities for growth. - Customers and contracts
You should indicate how many customers you have (note: do not share personal data here, only numbers), whether you rely on a few large customers or several smaller ones, and what contracts are currently in place. This is important for the security of future turnover. - Staff and organisation
Here you describe the number of staff (fulltime positions) and your role as the owner. Do you work in the business yourself, or does it run without you? - Assets, liabilities, and production data
Here you provide an overview of your assets. For example, machinery, stock, and any loans or liabilities. - Financial data of your business
Here you present the financial figures for recent years. This includes your turnover, profit, costs, and balance sheet data for at least 3 years. - Earnings before interest, taxes, depreciation, and amortisation, often referred to as EBITDA
EBITDA helps a buyer to quickly see how healthy your business is and how much profit your business makes from its normal operations. - Legal information
Here you should outline key legal information. This includes intellectual property, licences, current contracts, insurance policies, and any ongoing disputes. - Acquisition information
Here you should explain how you see the sale. For example, you can specify whether it involves a share transfer or an asset-liability transaction, whether you will remain involved after the sale, and what the indicative asking price is.
What is the difference between a sales memorandum and due diligence?
A sales memorandum provides an initial comprehensive overview of your business. In the due diligence process, the buyer carefully verifies your information.
Next step: the declaration of intent
Once you have shared all the key information about the business and negotiations with the buyer are becoming more concrete, you set out the terms of the sale in a declaration of intent. This document demonstrates that you are in broad agreement with one another.
