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Thinking of selling your business?

There are a number of things to consider when selling your business. Here are our top tips:

  1. How much is your business worth?

Get valuations from independent valuers. Think about what you want to sell and what you may want to hold on to.

  1. Consider tax reliefs and a reorganisation if necessary

Speak to your accountant about the most tax efficient way to sell your business. There may be certain reliefs available which make one way more cost effective. They may suggest a reorganisation prior to sale, and you may need to apply to HMRC to check they are happy the proposals do not amount to tax avoidance in due course.

  1. Get your house in order!

You will, in due course, have to give over a lot of information about your business. It would be useful to make sure you have copies of your up to date supplier contracts, customer contracts, employee contracts, pension information, and insurance information ready at the outset. If you have them, keep your management accounts up to date and accurate. The buyer will probably want to see your last 3 years formal accounts.  If you have employees and are selling business assets (as opposed to shares) then they would normally be expected to transfer on their existing terms to the buyer.

If you are selling assets rather than shares, consider any contracts which may need to be transferred to the buyer, such as a business lease.

  1. Don’t forget a Non-Disclosure/Confidentiality Agreement

Whether you wish to sell through an agent, or to approach possible buyers directly, remember you are likely to sell to a competitor. Protect your business information and your trade secrets by asking prospective buyers to sign a NDA/Confidentiality Agreement at the outset.

  1. Once you have a buyer- agree Heads of Terms

Your agent, solicitor and accountant can help you with this. Will the payment be paid upfront or in instalments?  Some standard requirements can include a request that you stay on as a consultant, that you agree not to compete with the business for a period of time, and that you provide certain warranties about the business.  Your solicitor can let you know what is normal and reasonable in a business sale and assist you in negotiation.

  1. Instruct your solicitor and start the process of due diligence

It is best to let your solicitor know you have agreed a sale from the outset, so they can help you negotiate favourable heads of terms. They can also help you with answering questions about your business and use the answers given to help limit your exposure under the contract.


For help from our experienced team, please contact Shaun Owen on 01905 723561

Added: 06 Jun 2017 13:26

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