Are you planning on selling your business?

We know selling a business is a significant milestone, marking the culmination of years of hard work and the next stage in a business owner’s life.

As experts in selling companies, we support businesses across various industries in Leicestershire and beyond. If you are contemplating or negotiating a sale of your business you should consider involving a legal expert at an early stage of your planning.

To help you prepare, we’ve outlined some of the key points below. Please also see our guide selling businesses here.

Should I sell the Shares or Assets?

This should be agreed with the buyer at the outset. Share sales can be favoured by sellers for tax treatment and not needing to undertake a process following sale to extract the sale proceeds from the company. We discuss this at greater length here.

How and when are you going to be paid?

You will need to agree the deal terms and, crucially, how much you want to receive from your exit.

Part of the price may be payable over a number of years or months (deferred consideration) or may be conditional on the performance of the business (earn-out consideration).

Seller protection

If the purchase price is to be paid over time then you may require the buyer to provide security for that payment. That possibly could be through charges over the buyer and company or through personal guarantees. We can advise on your options.

If the deal is based on an earn-out then you should look to include provisions in the sale agreement relating to how the business is to be ran in the earn-out period. For example, perhaps the buyer should not be able to make any material changes to the business without your consent or pay themselves big dividends when they should be paying the purchase price instead.

Do you want to continue in the business?

You should consider whether you want to step away from your responsibilities when you sell. The buyer may want you to continue for a short handover period or for an extended period of time. If so, you should give thought to what you want to be remunerated and an employment package (i.e. pension contributions, benefits, etc).

Getting your affairs in order

Typically, a buyer undertakes due diligence on the company to understand what they are buying and to decide whether to proceed. Please see here for information that a buyer and their solicitor may want to investigate. Getting this information together at an early stage should help towards meeting your targeted completion date.

How Lawson West Can Help

Selling a business is far easier when you have experienced advisors by your side guiding you through the process and overcoming any obstacles as they arise.

Our approach is to provide comprehensive support and guidance throughout the transaction. We look to make sure that any sale agreement is fair, proportionate and suitable to the deal you have negotiated. We work with you and your other advisers so that you can confidently proceed with your business sale and look to achieve a successful outcome.

If you believe you have a situation where you require legal advice, please contact us on telephone 0116 212 1000 or 01858 445 480, alternatively complete the free Contact Us form and we will get in touch as soon as possible.

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