The difference between selling your business at the price it is worth and selling it at the price you are offered is determined in the 12 to 18 months before you go to market. Not at the negotiating table, not in the data room, not when the buyer's solicitor is already reviewing your contracts. It is determined before — well before.
At BMC, we have advised the sell side of over 150 transactions in Spain. The pattern that repeats most frequently is not the seller who does not know what their business is worth — it is the seller who knows exactly what it is worth but cannot sustain that price through due diligence. This checklist is designed so that you can.
The Timeline: Priorities at Each Stage
Sale preparation is not a single block of work done at once. It is a layered process executed over a year or more. These are the priorities at each stage:
18 months before launch:
- Internal diagnostic (indicative valuation, preparation gap analysis)
- EBITDA normalisation: remove owner personal expenses from the profit and loss account
- Legal housekeeping: update company minute books, verify Registro Mercantil filings
- Decision on the fiscal structure of the sale (selling as an individual or through a holding company?)
12 months before:
- Close the financial year with a “clean” EBITDA (first normalised year)
- Formalise verbal agreements with principal clients and suppliers
- Resolve minor outstanding litigation (employment, supplier disputes)
- Begin reducing founder dependency: progressive delegation of responsibilities
6 months before:
- Second normalised year complete (or in progress)
- Virtual data room built and documentation at 80%
- Independent valuation report commissioned
- M&A adviser selected (sell-side mandate signed)
3 months before:
- Data room complete to 100%
- Internal employment audit completed
- Tax contingency review completed
- Information Memorandum (Cuaderno de Venta) drafted with adviser
Financial Track — 10 Points
The financial work has the greatest impact on price and takes the longest. It cannot be compressed into the final month.
1. Normalise EBITDA. Calculate the adjusted EBITDA for the last three financial years by removing: owner salary above or below market rate (replace with the cost of an external CEO performing the same role), rent on premises owned by the owner at non-market rates, personal expenses charged to the business (vehicles, private insurance, non-professional travel), non-recurring costs (resolved litigation, one-off refurbishments), and non-recurring income (asset disposals, one-off grants). This normalised EBITDA is what you will present to buyers and what will determine the price.
2. Remove related-party transactions at non-market prices. If the business has transactions with other companies owned by the same shareholder (purchasing materials from a spouse’s company, renting premises from the owner), verify that the prices are at market rates and document it. The buyer will analyse these as related-party transactions under Article 18 LIS. If the prices are not at market, the buyer will adjust EBITDA downwards.
3. Bring audit up to date. If the business is required to have statutory accounts audited (two of three criteria: assets exceeding €2.85M, turnover exceeding €5.7M, employees exceeding 50) and there are unaudited years, regularise the position before going to market. A company without a statutory audit in a segment where it is compulsory raises immediate suspicion. If audit is not required, consider commissioning a voluntary audit for the most recent year — it is a transparency signal that buyers value.
4. Prepare the EBITDA bridge. The bridge is the document that explains, year by year, why reported EBITDA differs from normalised EBITDA. It is the first question every buyer asks. Without it, the first phase of due diligence becomes an investigation into why the numbers do not reconcile, rather than a validation that they do.
5. Reconcile accounts, tax returns and bank statements. The buyer will systematically cross-reference the annual accounts filed at the Registro Mercantil, corporate income tax returns for the previous four years, and bank statements. Discrepancies — even explainable ones — generate questions, delays and risk perception. Before opening the data room, verify that all three documents are internally consistent.
6. Document normalised working capital. Working capital (stock plus debtors minus creditors) fluctuates seasonally. The buyer will want to adjust the price if the working capital at closing differs materially from the “normal” working capital. Prepare a monthly working capital table for the previous 18 months and calculate the normalised average. That number will be the basis for the completion accounts mechanism or the SPA price adjustment.
7. Resolve doubtful balance sheet items. Doubtful assets (long-outstanding debtors without adequate provision), unrecorded liabilities (disputed supplier payables, informal commitments), or inadequate provisions (outstanding warranties, litigious contingencies) should be resolved or provisioned before going to market. The buyer will find them in due diligence and use them as grounds for a price reduction.
8. Prepare credible financial projections. The buyer is not purchasing the past — they are purchasing the future. Prepare a three-to-five-year financial model with reasonable, documented assumptions — not optimistic projections without basis, but assumptions grounded in the company’s historical performance and market data. A well-prepared model allows the buyer to build their own investment thesis on a shared foundation with the seller.
9. Identify and quantify hidden assets. Many businesses carry assets that do not appear on the balance sheet at fair value: property acquired 20 years ago worth three times its book value, unregistered brands with market value, customer portfolios with multi-year contracts. A valuation report on intangible assets can significantly increase the price reference for the transaction. Our valuation team routinely identifies value that is invisible in the accounts.
10. Calculate true net financial debt. The price of an acquisition is always “enterprise value minus net financial debt plus excess cash”. Calculate precisely what constitutes net financial debt: bank loans, finance leases (not operating leases), shareholder loans, IFRS 16 lease liabilities, and outstanding balances with the AEAT and Social Security. Net financial debt higher than expected reduces equity value euro for euro.
Legal Track — 8 Points
11. Update the company minute book. This is the most common deficiency in mid-sized Spanish businesses. Prepare formal minutes for all general meetings and board meetings from the previous four years. The buyer’s solicitors will review the minute book looking for irregular decisions, unresolved agreements and undocumented appointments or removals.
12. Verify the Registro Mercantil. Confirm that annual accounts are filed for all years within the reviewable period, that the registered directors are correct, that the articles of association are up to date, and that the share capital and participation distribution match reality. Discrepancies between the registry and reality generate doubts about ownership and the validity of adopted resolutions.
13. Formalise verbal agreements with principal clients. The ten clients representing the greatest revenue should have written, signed contracts with clear price, term, renewal and termination provisions. A verbal agreement with a client representing 30% of revenue is a price discount lever in the buyer’s hands.
14. Formalise contracts with strategic suppliers. Suppliers on whom the business depends (exclusive raw materials, proprietary software, sole distributor) should have written contracts with documented price and exclusivity conditions. Review these contracts to confirm they contain no change-of-control clauses enabling automatic termination on acquisition.
15. Verify intellectual and industrial property ownership. Trademarks, trade names, web domains, patents and internally developed software must be registered in the company’s name — not the owner’s personal name. Check the validity of all trademarks registered with the OEPM or EUIPO, and confirm assignment-of-rights agreements with all external developers who have contributed to the company’s software.
16. Resolve minor outstanding litigation. Litigation in progress represents contingencies that the buyer will either discount from the price or convert into price retention. Where there is litigation with employees, suppliers or clients for modest amounts, assess whether it is commercially advantageous to settle before initiating the sale process. The equation is simple: cost to settle versus the price discount (multiple × contingency) it will generate during negotiation.
17. Bring licences and administrative permits up to date. Operating licences, sector-specific authorisations, registrations in specialist registers (health, agri-food, transport) and quality certifications must be current and valid. An expired operating licence at the main business premises of a food-service company can halt a transaction until it is renewed.
18. Review existing shareholder agreements. If there is a shareholder agreement between current shareholders, review it before initiating the process: pre-emption rights, drag-along and tag-along provisions, transfer restrictions, exit valuation mechanisms. Confirm that the sale process complies with the mechanisms established in the agreement so that no shareholder can block the transaction or claim damages post-closing.
Tax Track — 5 Points
19. Close open tax contingencies. Review the last four financial years (the general statute of limitations period) for: expenses deducted where the connection to the business activity is questionable, related-party transactions without transfer pricing documentation, and restructuring operations without the economic reports that support their fiscal neutrality. Where real contingencies exist, quantify and provision them. Where they are apparent contingencies that documentation can resolve, prepare that documentation before the data room is opened.
20. Document transfer pricing. If the business has related-party transactions (purchases from a shareholder’s company, services rendered to group entities, intra-group loans), verify that you have transfer pricing documentation demonstrating market prices. Spanish rules require specific documentation for groups with consolidated turnover exceeding €45M, but documentation is advisable for any company with material related-party transactions, since buyers will question them.
21. Plan the tax structure of the sale. Who is selling: you as an individual, or a holding company? This decision has enormous fiscal consequences. Selling as an individual, the capital gain is taxed at 19–28% under the personal income tax savings schedule. Selling through a holding company that holds at least 5% of the target for more than one year, the gain may qualify for a 95% participation exemption (Art. 21 LIS) — or potentially 100% if all conditions are met. Creating a holding structure ahead of sale requires 12 to 18 months’ lead time so that the restructuring cannot be challenged by the AEAT as a purely tax-motivated arrangement. Coordinate with our tax planning team well in advance.
22. Verify prescriptions. If there are tax years that have already prescribed (more than four years ago) containing adjustments or corrections, verify that the prescription is effective and has not been interrupted by AEAT review actions. In some companies, formal review actions on recent years mention and analyse older years, which can revive the prescription period in certain circumstances.
23. Obtain certificates of tax and social security compliance. Before opening the data room, obtain current certificates of good standing with the AEAT and the TGSS (Social Security). These have limited validity (formally six months, but use certificates less than 30 days old for maximum credibility), and their absence — or the presence of outstanding debts — is an immediate red flag.
Operational Track — 4 Points
24. Reduce founder dependency. This is the hardest factor to change and the one requiring the most lead time. If you personally manage relationships with your five largest clients, if you are the only person who understands certain critical processes, or if your management team has never made strategic decisions without your approval, the buyer will apply a 15–25% price discount for key-person risk — or will condition payment on your remaining in the business for two to three years post-closing. Begin genuine delegation of responsibilities at least 18 months before going to market.
25. Strengthen the management team. A management team capable of running the business independently after closing is an asset for which buyers pay a premium. If there is no Chief Operating Officer, Finance Director or Commercial Director with real autonomy, hire externally or promote from within before initiating the process. The cost of bringing in an external CFO 12 months before the sale is easily recovered if it prevents the buyer applying a management-risk discount to the price.
26. Document critical processes. The processes that make the business work — production, quality control, customer service, logistics — must be documented such that a competent person can execute them without depending on the founder. This documentation not only reduces key-person risk from the buyer’s perspective; it is also insurance for the business if a key manager leaves before closing.
27. Prepare a transition plan. The buyer will ask how you envisage managing the transition: how long you will be available to introduce the new owner to clients and the business, what commitments you are willing to make to clients and suppliers during the transition period, and what the plan is for key employees. Having prepared, credible answers to these questions removes a significant source of post-closing uncertainty that the buyer might otherwise convert into a price discount.
Personal Track — 3 Points
28. Define your post-sale objectives. What do you want to do afterwards? Invest in another business? Retire? Continue as an executive for two to three years? The answers determine how the transaction must be structured: if you want full, immediate liquidity, negotiate for a fixed price with no earn-outs; if you are willing to stay with the business and believe in its growth prospects, a partial earn-out may increase the total price achieved.
29. Define the scope of your non-compete. Post-sale non-compete agreements are standard and legally valid in Spain provided the requirements established by the Supreme Court are met: limited duration (typically two to four years), defined geographical and sector scope, and adequate compensation. Negotiate the scope of this clause before it appears in the buyer’s SPA draft — not after. An overly broad non-compete can prevent you from building your next business for years.
30. Manage confidentiality throughout the process. The sale process must remain confidential until closing. Premature leaks — to employees, clients or competitors — can trigger talent attrition that the buyer will use as a price argument, or put contracts with clients at risk who prefer not to work with a business “up for sale”. Define from the outset who knows the process is under way, and how the communication will be managed when the deal closes.
The Data Room: Structure and Tools
The data room is the shop window of the business during due diligence. Its organisation sends an immediate message to the buyer’s team: a well-structured data room says “this business is ready”; a disorganised one — with low-resolution scans and folders without structure — says the opposite.
For mid-sized Spanish businesses (€2M to €30M transaction value), the most commonly used platforms are:
- Large processes / PE: Datasite (formerly Merrill), Intralinks, Firmex — monthly cost €2,000–€5,000
- Mid-market: iDeals, DealRoom — monthly cost €500–€1,500
- Small / family processes: Google Drive or SharePoint with controlled access — zero cost, but limited permission control and no access audit trail
The standard folder structure for a mid-sized Spanish company:
01_CORPORATE
└─ Articles of incorporation
└─ Statutory amendments
└─ Current articles of association (consolidated)
└─ Minute book (digitised)
└─ Shareholder register
└─ Beneficial ownership certificate (Registro Mercantil)
02_FINANCIAL
└─ Annual accounts (last 4 years)
└─ Audit reports (where applicable)
└─ Monthly management accounts (last 18 months)
└─ Financial projections / model
└─ Financial debt: loan agreements, finance leases, credit facilities
└─ EBITDA bridge: reported → normalised
03_TAX
└─ Corporate income tax returns / Modelo 200 (last 4 years)
└─ VAT annual returns / Modelo 390 (last 4 years)
└─ Withholding tax returns / Modelo 190 (last 4 years)
└─ AEAT and TGSS compliance certificates
└─ Inspection records / regularisation agreements (if any)
└─ Transfer pricing documentation
04_LEGAL
└─ Principal client contracts (top 10)
└─ Strategic supplier contracts
└─ Lease agreements (premises, warehouses)
└─ Licences and administrative permits
└─ Intellectual / industrial property (trademarks, patents, domains)
└─ Outstanding litigation (description, amount, status)
05_EMPLOYMENT
└─ Employee census (name, category, seniority, salary, contract type)
└─ Applicable collective bargaining agreement
└─ Senior management contracts
└─ Existing non-compete and non-solicitation agreements
└─ ERE / ERTE records (if any)
└─ Social Security compliance certificate
06_OPERATIONAL
└─ Business model description
└─ Organisation chart
└─ Principal suppliers and commercial terms
└─ Principal clients (concentration analysis)
└─ Documented critical processesThe golden rule of the data room: anticipate the buyer’s questions. Every missing or incomplete document becomes a due diligence information request that delays the process and generates a perception of disorder. A data room complete to 90% from the buyer’s first day of access is a genuine negotiating advantage.
The ROI of Preparation: The Numbers
Is the effort worthwhile? Yes — with concrete figures.
A business with reported EBITDA of €600,000 that carries €150,000 of owner expenses through the profit and loss account has a normalised EBITDA of €750,000. At a 6x multiple, that represents €900,000 in additional value. The cost of normalising the financial statements with an adviser: €10,000 to €30,000.
A business that reaches the negotiating table with two outstanding employment claims of €100,000 each can expect the buyer to retain €300,000 to €400,000 from the price until resolution (the buyer applies an uncertainty premium). Resolving those claims before the process might cost €60,000 to €80,000 in total — saving €200,000 to €300,000 in price discounting.
The return on professional sale preparation is, systematically, 5x to 15x the investment made. It is the strongest argument for starting 18 months early.
To begin preparing your business for sale, the first step is an indicative valuation establishing the price reference and a gap analysis identifying the improvements with the greatest price impact. Our M&A team guides you through that initial diagnostic.
To deepen your understanding of what the buyer is looking for across the negotiating table, read our guide on buying a business in Spain. If you are evaluating whether to merge or sell, our guide on merger vs acquisition explains the structural differences before you decide.
You can also explore our valuation services and our selling guide, which form part of the preparation process for any business considering a sale.
