The moral of this story comes at the beginning, rather than at the end; "Talk to us sooner rather than later”. Some of the best sales are achieved after months, or even years of preparation.
In the meantime, this factsheet provides a host of hints and tips to achieve a successful business sale.
| Confidentiality |
Obtain a Confidentiality Agreement before letting the purchaser see the way you operate, your figures and secrets |
| Structure |
Should you sell your shares in the Company or have the Company sell its assets? We can advise. |
| Tax |
It is possible to structure the transaction so that no tax is payable. Consider your options carefully. |
| Handover |
The Purchaser may wish you to stay on to oversee a smooth transition of control to his people. If you want to get away, consider how your key Staff can be empowered to assume this role. |
| Disclosure |
Purchasers wish to be reassured that there are no "skeletons in the cupboard". They want to know what the problems are, if any. |
| Warranties |
If you refuse to give warranties, you will raise suspicions that you have something to hide. |
| Insurance |
Review your cover. Consider the possibility of insuring yourself against inadvertent misrepresentation. |
| Property |
The Purchaser will investigate title and find out all he can about your premises. Keep a file for all paperwork. Know where the deeds are. |
| Key Staff |
In return for pay rises, get them to agree a modern employment contract. |
| Employees |
Document all your staff employment terms. |
| Licences |
Your business may depend on a Licence to use a process or name or authorisation from governmental statutory or local authority. Check the formal requirements for assignment. |
| Contracts |
All businesses have on-going contracts. There may be contracts with Suppliers, Customers, Distributors, Franchisees, Licensees, Tenants, Equipment Leasers, Cleaning and Maintenance firms, Consultants. Check that all relationships are documented. |
| Intellectual Property |
There may be plans, drawings, graphics, art, models, designs, patents, trade marks. List them and document them. Check the formal requirements for assignment. |
| Litigation |
Consider whether to attempt settlement. Purchasers hate uncertainty or will use it to reduce the price. Consider the potential for adverse press comment. |
| Revenue |
Consider the quality of your income. The Purchaser will be trying to decide whether he can maintain it. |
| Expenditure |
The Purchaser will also be looking to see whether your expenditure can be reduced and yet still maintain revenue growth. Do that job yourself! |
| Documentation |
Your dealings with the Purchaser will be verbal. His lawyers will want documentary evidence. Start now. |
| Timetable |
Prepare properly, then you can confidently agree a tight timetable. Demand that the purchaser perform. |
| Discipline |
Consider your present practices in the light of the expectations of a potential Purchaser. Improve your administration and record keeping in anticipation. |
We would be happy to become more involved with your business and to render advice on your systems from a legal point of view.
