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Guide

Preparing a stock sale: show the buyer the whole company, on your terms.

When a buyer purchases your shares instead of picking out assets, it inherits the corporation itself: its contracts, its tax history, its employees and any liabilities nobody has found yet. That is why diligence on a stock sale tends to run deeper and longer than on an asset deal, and why the buyer's attorneys and accountants will ask for records going back years.

This guide walks through what a buyer typically requests after a letter of intent is signed, how to organize it so the review moves quickly, and how to keep sensitive material from spreading beyond the people who need it. This guide explains common practice. It is not legal, tax or financial advice, and your attorney, CPA or advisor should shape the plan for your own deal.

Why a stock sale changes what the buyer needs to see

In an asset sale, the buyer can leave unwanted liabilities behind. In a stock sale it generally cannot, so it protects itself in two ways: by investigating thoroughly, and by asking you for representations and warranties in the purchase agreement, often backed by an escrow or holdback. Your disclosure schedules are where you list the exceptions to those promises, and every exception should point to a document the buyer has already seen.

That link between the schedules and the data room matters. If a contract, a lawsuit or a tax notice is disclosed in the schedules but the buyer cannot find it in the room, expect questions late in the process, when time is shortest. Building the room and drafting the schedules side by side avoids that.

Entity type shapes the request list too. A Delaware C corporation with outside investors will be asked about its cap table, option grants and financing documents. An S corporation will be asked to show that its election was properly made and maintained, because a broken election can follow the shares to the new owner. Your CPA can tell you what applies to your company.

The records a buyer usually requests

Corporate and ownership

  • Certificate of incorporation, bylaws and every amendment.
  • Board and stockholder minutes and written consents.
  • The stock ledger and a current cap table, including options, warrants, SAFEs and convertible notes.
  • Stockholder, voting and buy-sell agreements, and good standing certificates from each state where you are registered.

Financial and tax

  • Three or more years of financial statements, plus monthly figures for the current year.
  • Federal and state income tax returns, payroll tax filings and sales tax filings where relevant.
  • Any IRS or state correspondence, examination notices and their outcomes.
  • A quality of earnings report, if you commissioned one before going to market.

Commercial, people and risk

  • Material customer and supplier contracts, with any change-of-control or assignment clauses flagged.
  • Leases, loan agreements and lien search results.
  • Employee census, offer letters, benefit plan documents and contractor agreements.
  • Insurance policies, claims history, pending or threatened litigation, and intellectual property registrations and assignments.

Setting up the room for a stock sale

  1. 1

    Mirror the buyer's request list

    Load the buyer's diligence list as a document request list, assign each item to the person on your side who holds it, and track it from requested to provided.

  2. 2

    Upload with structure intact

    Drag whole folders in and the structure comes with them. ShareAndGo can also read each file, including scans, and suggest where it belongs.

  3. 3

    Ask for the NDA at the door

    Require visitors to accept your confidentiality terms before entering, and keep the record of who accepted and when.

  4. 4

    Stage what each party sees

    Put the buyer's deal team, its lender and its accountants in separate groups, each limited to the folders it needs.

Controlling the most sensitive material

Some documents should be read but not kept: employee compensation, customer pricing, and anything a competitor-buyer could use if the deal falls through. Make those folders view-only. View-only readers see pages rendered on our side, watermarked with their name, email address and the date, and the original file is never sent to their browser.

Questions arrive in volume during a stock sale. Handle them in the room's question and answer area, where each question can be assigned to the right person on your team, categorized and prioritized. Owners can ask for an AI-drafted answer to review before posting it. When you update a document in response, upload it as a new version and the earlier one remains in the history.

ShareAndGo's insights show who opened the room and what they read, which tells you whether the buyer is still working. If the deal ends, revoke access in one step and export the room as a ZIP with an index of every document, so you have a record of exactly what was disclosed.

Questions

Is a stock sale better than an asset sale?
It depends on taxes, liabilities, contracts that cannot be assigned and the buyer's preference. That is a question for your attorney and CPA, not a data room.
Can the buyer's lender see the room?
Yes, in its own group, limited to the folders you choose and with its own download settings.
Does the audit log help with the disclosure schedules?
It records every view, download and invitation, chained so alterations are detectable, and exports as CSV. It shows what was opened and when. What that means for your agreement is for your attorney.

Related guides

Preparing an asset sale

When the buyer chooses which assets and liabilities to take.

Preparing for a business valuation

Getting the numbers ready before you go to market.

A partner buy-out

When the buyer is already inside the business.

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Every business process we cover.