17th Dec 2019

10 things to consider when selling a business

We deal with a lot of business sales and acquisitions – both corporate (usually share sales/purchases) and asset transactions.  One message is often clear – these things have to be planned for, because if a business isn’t run with an eye to sale, you’ll have some messy odds and ends which are likely to trip you up.  Some of the things to make sure you’re on top of are:

  1. Make sure any shares which have been sold, transferred etc have been recorded in the company’s register, and in the latest filings to Companies House;
  2. Make sure you know where your commercial contracts are and that they are actually signed (you’d be surprised…)  
  3.  Think about our intellectual property – what have you got; have you got the right licenses; do you own what you think you own (who created that program, or that website)
  4. Is there anything which might prevent a sale – could a key customer terminate a contract, is someone’s consent necessary for an important stage; do you use “change of control” clauses?
  5. How much does the business depend on its owner managers; can it be sold as an entity with value aside from the sweat of the owners’ brows?
  6.  Do you have employment contracts in place for everyone, and do key employees have restrictions which prevent them walking  and setting up in competition?   
  7. Have you got any disputes or regulatory investigations bubbling under? – buyers won’t want to buy a dispute.
  8. Do you have a software product with open source components?
  9. Are you on top of data protection issues – do you know what needs consent, what you can do  as a legitimate business interest; do you have proper records in place to meet data protection requirements on governance, accountability and transparency?
  10. Do you have a clear strategy? Sit down and identify where you want to get to and make sure you keep on track.

And if you are looking to sell, get the right advisers in place early; and be aware of the time resource which a sale or a purchase takes, and plan for that, so that the business doesn’t lose focus on value in the curse of a transaction.


Sarah Levrier is a Solicitor in Berwins' Business team 

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