SELLING YOUR BUSINESS
By Matt Chalfont-Griffin
Selling your business as a going concern can be a stressful process. You need to be careful who you instruct to deal with the marketing and sale of your business to ensure confidentiality, if that is required, but also a professional approach.
Some business selling agents insist, for example, on charging an upfront fee to buyers which can, on occasion, be less than popular with those individuals. Many argue that business selling agents should be paid only as and when the transaction has been concluded.
Be careful what terms and conditions you enter into with the business selling agent before you instruct them and it is no bad thing to seek some professional guidance from a solicitor at an early stage.
The other reason it is a good idea to seek professional advice and guidance at an early stage is that preparation of information in readiness for the sale is exceedingly beneficial when it is done at the start of the transaction. That way once a buyer is found, the sale or purchase can proceed with speed. There is nothing that puts a buyer off more on a transaction than negotiating the deal with a seller and then sitting and waiting for a couple of weeks before anything actually progresses. Do your preparatory work and get the information that a buyer and their solicitors are going to need ready and prepared at an early stage.
Accountants must be involved. Sometimes an accountant advises that we should be dealing with a Share Purchase transaction. Generally sales of small businesses are dealt with as Transfers of Going Concerns, which are VAT exempt. That is not to say that accountancy advice will not be required though. Apportioning the price between the property, whether it is freehold or leasehold, the goodwill of the business and the fixtures, fittings and equipment is essential. Tax advice is required so the transaction is structured in the best possible way for you as a seller.
There may be information such as Capital Allowances that is required as well for the buyer and their solicitors.
There are lots of areas of law that are relevant when someone comes to sell a business. There is an awful lot of professional guidance that is required, not just from accountants and business selling agents but the role of the solicitor is absolutely essential.
Getting things right in relation to the Rules and Regulations required for transferring employees is imperative, especially if there are pensions involved.
Ensuring that your premises complies with the appropriate health and safety and statutory compliance regulations is very important at an early stage. If there are things that have not been done appropriately then it is just going to delay the transaction, which is another reason why instructing a solicitor at an early stage to assist you with the preparation of the sales paperwork is important. They will be able to establish what is missing and what additional information might be required.
Sometimes premises need transfers of licences such as when a Premises Licence for the sale of alcohol is involved and there is a process that needs to be followed in that regard as well.
The sale of a business can be a very straightforward transaction, regardless of the nature of the business. Getting the right advice, at the right time, from the right professionals is essential.