There is a saying that goes, “If you take care of the little things, the big things take care of themselves.” I am not proposing that we ignore the big picture items, the key milestones or the end state we are striving for. I am saying that by paying attention to the little details that can trip up a transaction, it makes meeting the milestones a much easier process.

What are some of the little details in a transaction? There are a number of them that can go from a little detail to a large delay, and with some planning and preparation, they become easy boxes to check. Some of these are specific to Michigan based businesses.

• Form UIA 1027, Business Transferor’s Notice to Transferee of Unemployment Tax Liability and Rate. This is used by the seller to disclose any issues that could affect current or future tax rates, and must be disclosed for the most recent 5 years. It is a misdemeanor not to disclose to the buyer.
• Form 5156, Request for Tax Clearance. Used by the seller to have the Michigan Department of Treasury provide known or estimated tax liability for the purpose of establishing a tax escrow, if any. The request must come from the seller and after the transaction is complete a new request is submitted to obtain a certificate for the release of an escrowed funds.
• Articles of Incorporation with Amendments, Bylaws, Certificate of Good Standing. These will be requested during the due diligence phase and copies should be confirmed, up to date, and made available.
• Start early to understand the scope of insurance needed, and have an insurance agent ready to review and requote if needed. This process does not take long but should not be overlooked or delayed until the last minute.
• Environmental Due Diligence. If there will be Real Estate involved in a transaction a Phase 1 will typically be a requirement of the funding source. If a Phase 1 has been done in the past, having an electronic copy available will save time and energy when it is requested. If the Phase I is out of date, the information provided in the Phase 1 will expedite an updated test or refresh as needed.

This is by no means an exhaustive list of the items needed to be done during a transaction. It is a short list of small details that are important and easy ones to stay ahead of. Having a process in place and an experienced team to facilitate that process results in successful transactions.