Top 10 Tips for Selling a Business

Posted by Malcolm Campbell on 15 February 2017
Top 10 Tips for Selling a Business

 

 

 

 

 

 

 

 

  1. Make sure the method used in valuing the business is accurate and, if relevant to your business, that there is a mechanism for valuing any trading stock at completion;

  2. If you agree to a deferred purchase price payment structure, consider requiring security or a guarantee in respect of the outstanding amounts, minimise where possible the right of retention by the purchaser and always specify minimum values as to claims to be made by the purchaser for things such as alleged breach of warranties to ensure you get as much of the deferred payments in you pocket as possible;

  3. Carefully consider apportionment of the purchase price for the purposes of CGT;

  4. Identify the intellectual property owned or licensed by you and determine whether such intellectual property can be assigned;

  5. Ensure that you have received proper assignment of any intellectual property created by third parties prior to entering into the sale contract;

  6. If you are to remain liable under a lease or other contract, obtain indemnities from the purchaser;

  7. Make sure you understand your obligations under your lease and other key contracts which you wish to transfer as part of the sale;

  8. Co-operate with the due diligence enquiries of the purchaser, but ensure proper confidentiality provisions are entered into with them before handing over your sensitive information;

  9. Be aware of the possible consequences of any pre-contractual representations made; and

  10. Ensure that you only give warranties that you are able to comply with and that any changes are fully disclosed in writing prior to completion

To read more about selling a business read our Blog Series on Buying & Selling Businesses:

Part 1 - Overview

Part 2 - Structure of the Transaction

Part 3 - Pre-Contractual Negotiations

Part 4 - Key Issues to Consider

Part 5A - What Can Go Wrong After Completion

Part 5B - What Can Go Wrong After Completion

Part 5C - What Can Go Wrong After Completion

Part 6 - Managing the Risks

Back