If you are thinking of selling your business you will need experienced lawyers to ensure the negotiated terms of the deal and contracts are right and to complete the transaction quickly.
Solicitors for selling a business
Our corporate team are highly experienced and cost effective, offering you assurance during the sale process, from the negotiations through to the drafting of the key legal documents.We have offices in many parts of England & Wales and 10 offices in London alone. More than 50 of our specialist commercial lawyers regularly advise clients on business sales
As a firm, our fees are competitive, so please do contact us to discuss your sale and what we would charge in fees.
Preparing to sell your business
In our experience, good preparation is key to a successful business sale. Before finding a buyer, you should be :-
- Considering the valuation of your business - there are many different ways businesses can be valued.
- Will you agree to stay on for a period after the business sale?
- Are you prepared top have restrictions placed on your ability to start another business of the same type or work with a competitor
- Wil you accept dome form of deferred consideration i.e not receiving teh full sale price on completion
- Anticipating the due diligence a buyer will expect to eb available, not just financial. The buyer will want to look at your IP, contracts, employment contracts and many other areas
- Do you have consent from all shareholders oin the business to sell? If not can you compel them to sell via drag along rights you have?
Key legal issues with a business sale
When a business is being sold, the following will almost certainly apply, especially if the sale is of the entire share capital of a private company :-
- Heads of Agreement - a document which sets out the main terms agreed between the parties. Typically Heads of Agreement are non-binding, although everything is negotiable and some parts such as confidentiality and initial legal costs if 1 party pulls out might be agreed as contractually binding.
- Deal Structure - a key aspect and especially the price and how it will be paid. This varies a lot and can involve many forms whether part cash, part shares or deferred payment of part of the purchase price based on performance (known as an Earn Out). It may also be that the buyer is relying on finance and so the seller and their solicitor will need to satisfy the lenders requirements as well as the buyer's solicitors.
- Business sale contract - key aspects will be warranties and indemnities, any agreed exclusions or restrictions on liability, and generally, the negotiated final position on liabilities and risks.
- Disclosure letter - important so that as seller you disclose potential problems and risks which then no longer form part of warranties and indemnities.
- Employees - post purchase the buyer will want to ensure that key employees are on side and remain. This can often include requiring you as seller and senior employees to stay on for an agreed period to smooth the transition. Any employees who are leaving, which may include director shareholders, will almost certainly be required to agree non-competition/non-poaching restrictive covenants which will need to be negotiated. Other issues that can arise are where you have employee shareholders or employees who have share options.
- Tax - what tax will you have to pay on sale and can the deal be structured in any way to mitigate tax?
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