You may have spent years establishing your business so it is probably prudent to give careful consideration to your exit plan.
You might want to consider the following if you are planning to sell your business:
Start to get your house in order and involve your professional advisers early. Being able to deliver a “clean” business for sale should not be under-estimated. Think about reviewing all documents such as contracts, statutory books, company policies etc and resolving any outstanding disputes.
The buyer will conduct due diligence on your business which involves asking multiple questions. You should ensure that a confidentiality agreement is in place to protect the information being disclosed.
Consider the type of buyer and its source of finance whilst planning as each type might raise different legal issues.
Discuss with your accountant how best to structure the transaction so that is tax and accounting efficient.
Business valuation is not an exact science so you will need to justify the price tag. Financial forecasts with detailed written assumptions to support the numbers will help.
Whilst most sellers would prefer the full purchase price to be paid upfront, it is common for part of the purchase price to be deferred. If so, consider obtaining some sort of security for the deferred amounts such as a charge over the assets of the Company.
The sale and purchase agreement tends to be a lengthy document usually including pages of warranties. Warranties are just statements of fact about your business so you need to be confident that such statements are correct and, where not, you (with assistance from your legal adviser) will need to prepare a disclosure letter to qualify those warranties.
Selling a business is not quite the same as selling other physical assets. It can get quite complex so it helps to plan and work with your professional advisers to anticipate possible hurdles
Contact Richard Jenkins on 024 7698 0613 or Richard@clariclegal.co.uk for further advice or assistance.
This should not be relied upon for legal advice.