Selling your business
When should you start to prepare your business for sale?
Dreaming of retirement?
There is a saying that you should start preparing your business for sale the day you start trading. This is because you never know when you will receive a lucrative unsolicited offer for your business. If you have your business in good shape then you should be able to take advantage of this offer but if your policies, procedures and contracts are not up to date then the buyer may not proceed or may only proceed by way of a reduced offer.
If you have identified someone who is interested in purchasing your business you will need to ensure that the buyer signs a “non-disclosure” or “confidentiality” agreement. You do not want your biggest competitor to start a fishing expedition to find out who your customers are and your terms of trade so that they can then try to poach them away from you.
More than likely you will receive a verbal offer, which will then be formalised in written “heads of terms” or a “letter of intent”.
The next stage is due diligence. This is the process whereby the proposed buyer and their advisers gather information about your business. It can be lengthy and engage management for some time. You may find that you are answering the same questions multiple times – once for the accountants and again for the lawyers. We will manage this process for you as much as possible to avoid this repetition.
The buyer’s solicitors usually prepare the sale and purchase agreement. We will review the agreement with you in detail, explain all of the clauses, warranties and indemnities. You will have to go through an exercise called “disclosure” which involves reviewing the warranties and indemnities and setting out in writing where any of the statements are not correct. Again, we will guide you through this process.
It can be a daunting process but with our expertise we can help make it as straightforward as possible for you.
Please contact the corporate team at Myers & Co if you have received an offer or are considering selling your business.
Based in Stoke-on-Trent, Staffordshire, our corporate lawyers have a reputation for providing expert advice. For further advice contact Myers & Co Solicitors on 01782 577000.
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