John Crow 
When Kentucky business owners start thinking about selling, one of the first questions is simple: what paperwork do I actually need?
It sounds straightforward, but the answer is surprisingly complex. Buyers want proof that your business is what you say it is. Banks and investors want clean records before they lend money. State agencies in Kentucky want to make sure every tax return and license is wrapped up before you hand over the keys.
This article explains the paperwork you will need at every stage of the sale, from the moment you decide to sell until the day you close. Along the way, we will use examples from real Kentucky industries to make it practical.
Why Paperwork Matters When Selling a Business
Paperwork builds trust. A buyer in Louisville or Lexington will pay more for a company that has clean, organized records than for one with missing tax returns and outdated contracts.
Without the right documents:
- Deals get delayed
- Buyers lose confidence and may walk away
- Sellers risk lawsuits after the sale
The good news is that you can get ahead of these issues by preparing early.
Stage One: Before You List Your Business
This stage is about preparation. Even before you talk to a buyer, you should gather and organize the following documents.
Financial Records
- At least three years of federal and Kentucky state tax returns
- Profit and loss statements
- Balance sheets
- Bank statements
- Lists of accounts receivable and accounts payable
Corporate Records
- Articles of Incorporation or Organization
- Operating Agreement or Bylaws
- Shareholder or Member agreements
- Annual reports filed with the Kentucky Secretary of State
Licenses and Permits
- Kentucky business license
- Local occupational or business licenses
- Industry specific licenses such as liquor, contractor, or healthcare permits
Real Estate and Leases
- Copies of commercial leases
- Deeds or mortgage records if you own property
- Equipment lists with serial numbers if you plan to sell equipment with the business
Stage Two: Marketing and Early Negotiations
Once you are ready to find a buyer, paperwork shifts toward presentation and confidentiality.
- Confidentiality Agreement (NDA): Before sharing sensitive financials or customer information, ask potential buyers to sign an NDA.
- Business Summary or Prospectus: Highlights revenue, operations, customers, and growth opportunities.
- Letter of Intent (LOI): Outlines the price, payment structure, type of sale, timeline, and exclusivity period.
Stage Three: Due Diligence
This is the most document heavy part of the sale. Buyers want to look under the hood before committing.
Legal Documents
- Customer contracts
- Vendor and supplier agreements
- Loan and credit agreements
- Trademarks, patents, and copyrights
- Equipment leases
- Partnership or joint venture agreements
Employee Information
- List of employees with roles and salaries
- Copies of employment contracts or offer letters
- Benefit plan documents
- Independent contractor agreements
Insurance Policies
- General liability
- Workers compensation
- Property insurance
- Any industry specific coverage
Litigation and Compliance Records
- Past or pending lawsuits
- Regulatory compliance documents
- OSHA records for manufacturing or construction businesses
Kentucky Specific Tax Records: Buyers will insist on proof that you are current on corporate income tax, limited liability entity tax, sales and use tax, and local occupational or business taxes.
Stage Four: Closing Day Paperwork
When the sale is ready to close, several key documents are signed. These include:
- Purchase Agreement
- Bill of Sale
- Assignment of Contracts
- Lease Assignment
- Employment or Consulting Agreements
- Non Competeor Non Solicit Agreements
- Closing Statement
- Secretary of State Filings
- Final State and Local Tax Filings
Kentucky Examples
- Lexington Law Firm Sale: A small law firm in Lexington is sold to a younger attorney. The seller provides three years of tax returns, client engagement agreements, and proof of good standing with the Kentucky Bar Association. At closing, the parties sign a purchase agreement and employment contracts for the staff.
- Louisville Logistics Company: A trucking company in Louisville sells to a regional competitor. Paperwork includes vehicle titles, DOT permits, employee agreements, and insurance policies. The buyer requires proof that the seller has filed all Kentucky fuel and use tax returns before releasing final payment.
- Hopkinsville Agricultural Supply Store: A family owned store in Hopkinsville sells to a new owner. Paperwork includes vendor agreements with suppliers, the commercial lease, and local business licenses. At closing, the buyer signs a purchase agreement, bill of sale, and lease assignment.
Common Questions from Kentucky Owners
- What if I cannot find all my old contracts?
- It is better to disclose missing documents than hide the issue.
- Do I have to give buyers employee information?
- Yes, at least in summary form. Buyers want to know what obligations they are taking on.
- How do I prove taxes are current?
- Your accountant can provide proof of filings and payments from the Kentucky Department of Revenue.
Mistakes to Avoid When Selling a Business
- Not starting paperwork until you already have a buyer
- Forgetting county or city occupational licenses
- Mixing personal and business expenses in financials
- Rushing through due diligence just to get to closing
- Signing contracts without a lawyer’s review
Final Thoughts
Selling a business in Kentucky is not just about finding a buyer. It is about preparing the right paperwork to show your business is solid, to give buyers confidence, and to protect yourself after closing.
When you gather documents early, keep them organized, and get professional help, you will be in a much stronger position to negotiate and to close smoothly.
Ready to Sell Your Business in Kentucky?
At Crow Estate Planning & Probate, PLC, we help Kentucky business owners prepare and manage the paperwork needed to sell. From organizing financials and contracts to handling Secretary of State filings and tax close outs, we make sure you are protected every step of the way.
If you are ready to start the process, contact us today. Let us guide you through the paperwork and help you move forward with confidence.
About the Author
John Crow is the founder, owner, and principal attorney of Crow Estate Planning and Probate, PLC. With over a decade of legal experience in the areas of estate planning, probate, conservatorships, guardianships, and business planning, he serves clients in the greater middle Tennessee and southern Kentucky regions. He obtained his Bachelor of Arts degree in History from Vanderbilt University, then later received his Juris Doctorate from the Cumberland School of Law at Samford University. He is a lifelong Clarksville resident and is honored to have helped so many families over the years. Learn More.
Licensed in Tennessee and Kentucky