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Sale and purchase of a business

Are you considering buying or selling a business? We can help you every step of the way.

If you are selling a business, perhaps one you have spent years and years developing, you’ll want to get a worthy return on your investment. It is important to know the value of your business, to include not only the tangible capital assets and stock, but goodwill, and the strength of what it is you are selling in the current market. We can help you to evaluate this to decide a starting figure or negotiate finances with potential buyers. We can also help you to ensure your paperwork is in order, in particular your accounts, which will want to be seen and scrutinised by any potential buyer.

The business you are selling may still be fully operational. If you are trying to maximise the perceived value of the business, it is better that it is trading, than dormant. If you are still managing the business day-to-day, it may be hard to find the time to take enquiries from prospective buyers or embark on lengthy price negotiations.  We can do this for you, and also undertake the necessary due diligence on buyers to check they, and indeed their funds are legitimate.  Assuming they are, we can then draft the necessary documents to effect the transaction, most important of which, is of course the sale contract.

 

Conversely, if you are buying a business, similar considerations will nonetheless apply. You will need to ask whether your perceived valuation of the business you seek to buy is aligned with the asking price. If not, this may be negotiated. You’ll also want assurances that the seller is fully transparent, and that you are fully aware of what it is you are committing to.  Depending on your finances you may need assistance in deciding payment terms that are agreeable to both of you.  Payment terms if favourable to a seller may in fact lower the final figure. As part of the contract, the seller may also be willing to stay on temporarily on a consultancy basis to guide you through the first few months, or in other words ‘show you the ropes’.

There are two methods of effecting a business sale or purchase, it can be an asset sale or a share sale.  If the business belongs to a sole trader or partnership, it will be an asset sale. If the business is a limited company, the buyer and seller can elect which method they prefer. There are pros and cons of both options, and we can advise you as to the most appropriate for your particular business objectives.

Whilst we don’t give tax advice on these transactions, except with regards to the stamp duty due on share purchases, we will liaise with your accountants about any tax issues to ensure the transaction proceeds smoothly.

In addition to the above, we can also advise on:

 

  • Preliminary confidentiality agreements to ensure that what is discussed remains confidential
  • Heads of terms and terms of agreements
  • ‘TUPE transfers’ of employees
  • Warranties to be given by the seller
  • Overseeing completion and attending to filing requirements
  • Exit strategies

 

We can also assist with management buy-outs, group restructuring, and the funding of a business purchase.

Stephen Avila 

Solicitor and Head of Commercial Department

 

“It really means a lot to us to have someone we like and can trust backing us up in the way you do”

Matters related to sale and purchase of a business –

Depending on your circumstances you may need advice for various reasons such as:

For more information on setting up a business

Please complete our contact us form at the top of this page, email [email protected] or feel free to call us on 01206 577676.