Selling a business involves a detailed understanding of transaction protocols, and business and local law. A qualified lawyer can assist the seller in ensuring a smooth transaction and avoiding frequent pitfalls.
Preparing to Sell:
The first step in selling your business is to prepare it for sale. Make certain that your finances are in order. We recommend speaking with your accountant to determine if there is anything that needs to be done to ensure that your accounts are in the best possible condition to present to a potential buyer.
Ensure that all of your intellectual property has been adequately safeguarded, including trademarks that have been applied for, registered, and renewed (where appropriate), and licence agreements with third parties that are using your intellectual property.
Examine your lease documents to ensure that there are sufficient renewal rights or time remaining on the current term to make the arrangement appealing. The last thing you want is for a buyer to use the fact that the lease is about to expire as an excuse to ask for a discount on the buying price.
One of the most crucial components of selling your business is negotiating the terms of your sale agreement. A sale and purchase agreement is usually provided by the buyer for you to review. After that, you’ll go over the agreement and, if everything looks good, you’ll sign it. However, in most cases, there will be some wrangling to reach an arrangement that is satisfactory to both you and the buyer. We strongly advise you to get legal advice before signing the Agreement.
A Sale and Purchase Agreement is frequently subject to a number of conditions, such as the purchaser conducting due diligence on the business, obtaining satisfactory financing for the purchase, landlord approval (if there is a lease), and other conditions.
Once all of the conditions are met, you are legally required to sell the business to the buyer. There will almost certainly be some requirements on your pending settlement, such as terminating your employment contracts with any employees. You will need to determine how much (if any) you need to pay the bank and arrange for the release of any securities registered against any of the assets being purchased.
If the company deals with stock, there will almost certainly be a stocktake to determine how much is owed. If a lease is involved, we must ensure that the Deed of Assignment is signed and ready for settlement. In addition, if the business is a franchise, any requirements the franchisor has for selling the business must be determined and met.
Once the sale of your business is complete, the purchaser pays the agreed-upon price and takes ownership of the business. As your lawyers, we will need to prepare a settlement statement outlining the total amount payable by the purchaser, considering any deposits paid and any apportionments that must be made.
We enjoy assisting our clients in the purchase and sale of businesses. If you are considering selling your business, please contact us! We can help you understand what you need to do to prepare your business for sale and guide you through the process as painlessly as possible.