Sale of Business Advisory
Our lawyers at SettleHub are experts at doing legal analysis on ways to structure a potential sale, we can take your considerations into account and prepare a detailed cost benefit analysis on how to go about preparing for the sale of your business.
One of the first decisions you and your partners must make is how you will be selling the business. If you are completely exiting the business, then you and your partners must consider a complete share or asset sale of the business and its associated entities. However, if you are looking at introducing new shareholders to the business and/or looking to sell off an underperforming asset of the business, then the considerations will be different.
Thinking of selling your business?
Business sales can take multiple forms, however, in general the sale could be achieved in one of the following ways:
- Sale of company shares
- Sale of company assets
As an entrepreneur, exiting your business is often one of the hardest things to do. This decision is often emotionally taxing and legally complicated. One must consider the taxation implications as well as the impact on your individual future after the sale of the business. It is essential that you comply with the various regulations when exiting a business.
Partial asset sale
You may own a piece of equipment or a factory that you are intending to sell as part of a business restructure. It is important to consider the overall legal and financial implications of such a decision. Often in these instances you would attract complex capital gains taxes and would need to consider the implications of any guarantees and/or securitisation of these assets.
Our team has a history of assisting businesses to assess the implications of such decisions and can provide you with time sensitive advice. When embarking on partial asset sales, it is crucial that the sale documentation is prepared in a robust manner to ensure that the purchaser performs their end of the bargain.
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Partial share sale
There may come a time in your business journey where you need additional capital, or you are seeking to retain a critical employee. At these moments, it would be prudent to consider the sale of some shares held by you and your partners. The partial sale of shares is often issued to either an equity investor, who is willing to join the business as a capital investor or a senior employee that the firm wishes to retain for the long run.
At SettleHub, we look at both your current commercial position as well as the future implications of such a sale. Our experts will advise you on how to structure the sale so that you may retain control over the operations of the company and put in place shareholder agreements to ensure that all new partners are working towards the common prosperity of the business.
Complete sale of shares
A complete share sale entails the transferring of the entirety of the shares held by you and your partners to a new purchaser. The process will effectively make you exit the business and the industry it operates in, completely for a certain period of time.
In selling the shares of your business, the purchaser buys both the assets and liabilities of the company. You will need to resign as the director and transfer all physical and intellectual property held by the company into the name of the new purchaser.
Typically, in complete share sale situations the purchaser will require that the directors and shareholders of the selling entity enters into contracts restricting their ability to trade in that particular industry for a certain period of time.
Our solicitors are experienced in advising clients on their rights and obligations when selling a business in its entirety. We can help you legislate against any future issues that may arise after you have disposed of your shareholding, as well as ensure the contract of sale has clauses protecting your interest as the vendor.
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In our years of legal work at SettleHub, we have seen and helped structure various forms of complete asset sales. Our team will work with you to identify the various assets held by the firm, work with your accountants on reaching an agreement on the good will valuation for the brand and most importantly advice you on the liabilities of the business.
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It is rare that purchasers would want to buy the shares of an existing company as the risks of the company's existing liabilities are too wide ranging. Often, purchasers seeking to buy an entire business will do so via the complete purchase of both its physical and intellectual property.
The legal complexities of a complete asset sale stems from the fact that you still retain the shares of the company post sale. If you do not take adequate steps to liquidate this company, you may be open to litigation from third parties who may have grievances with you for work done while you were running the business.
Our team will prepare the necessary documentation to ensure that once the sale is complete, all future liabilities accrue only to the purchaser. We will walk you through how to identify the liabilities that you have accrued throughout the years of doing business and then help you reach settlement with the third parties holding these liabilities.
How can we help when selling a business
Regardless of which of the above options you select, our team of experts will guide you through the process by:
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Providing advice on the sale structure
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Drafting share sale or asset sale contracts
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Drafting the necessary special conditions to protect your legal interests
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Finalising the Vendor warranties and indemnities to the buyer
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Assisting you in negotiating post sale obligations with the buyer's representatives
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Undertaking the conveyancing process of the share or asset sale
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Advising you on post completing obligations
FAQs on Sale of business
Find answers to commonly asked questions
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