Top 5 Things to Consider When Selling Your Business

When it comes to selling a business or your shareholding in a business, you should keep several key considerations in mind. Here are our Top 5:

  1. Identify potential buyers: Start by understanding the market and identifying potential buyers who may be interested in purchasing your business or shareholding.   To sell your business, consider engaging a broker or advertising it through trade publications and sales platforms. If you are a part-owner of a business, consider if your other shareholder(s) can/will purchase your shares. 
  2. Record and document all transactions: Make sure to maintain records of all relevant documents and information necessary for a potential buyer to make an informed buying decision. This includes audited financial statements, tax returns, key legal agreements, updated customer lists, as well as any regulatory reports.
  3. Draft a sale agreement: Ensure you draft a legally binding sale agreement with the help of a lawyer or accountant that clearly sets out all terms and conditions. It should include details such as the purchase price, payment of existing debts, transfer of ownership and liabilities, and your rights to work in other businesses post-sale.
  4. Market your shareholding: Develop a marketing plan that speaks to potential buyers. Your business needs to be a compelling opportunity for a potential purchaser. List potential opportunities for growth or increased sales, as well as current income and outgoings. Like you would market your home, you must explain the business opportunity and potential return to buyers.   A broker or financial services provider can assist you in preparing this information.
  5. Tax considerations: Consider the tax implications of the sale, as there may be capital gains tax implications. Be sure to seek appropriate tax advice prior to entering into any agreement.

By being aware of the key considerations in selling your business or shareholding, you will be better prepared to make an informed decision. If you need assistance in any sale, please get in touch with our Business Lawyers. We’re here to help.

 

 

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