Should you be thinking of selling your business it is vital that you plan ahead by reviewing your business and personal situation, before making a final decision, This should include a legal, tax, accountancy and, if appropriate, a pension review to ensure that any potential problems can be dealt with in advance.
From a legal point of view, make sure that your Solicitors have had experience with business transfers; that they have the capability of working to agreed timescales and within an agreed budget. There are both advantages and disadvantages with a "Share Sale" or an "Asset Sale" (including tax issues) so make sure you know which one is appropriate for you. Other legal issues such as potential environmental or health & safety problems need to be resolved as they could well be picked up in the purchaser's "due diligence" exercise, which if not resolved, will only prolong the sale, reduce the offer price or cause a collapse of the deal altogether.
Changes to the tax rules seem to change as frequently as our weather, so it is vital to ensure that the deal is structured tax efficiently by taking specialist advice on a regular basis. Capital Gains Tax, Taper Relief and the setting up of Trust Funds are always under review, so it is important to check out the trends and cross-check with your advisers, before deciding which route to follow.
An accountancy review of the business is equally important. The value of the business can be maximised if the accounts show steady and sustainable profits and growth. Businesses likely to loose money in the year of a sale are not easy to sell, particularly as an initial offer can be reduced or totally withdrawn if unexpected trading losses are found. Potential purchasers will need to see not only copies of the Statutory Accounts but will want to see up to date Management Accounts, fixed assets registers etc so make sure any accountancy problems are resolved, well in advance.
If you are selling a business in order to retire, then it makes sense to discuss this with your pension adviser before the deal is structured. As with tax, pension rules change and decisions to be made may often depend on your own personal situation,
Selling a business can be a complex process and timescales can easily become lengthened when problems could have been resolved before the process had actually started. When you consider that a business sale is often a once in a life time opportunity, after years of hard work, it makes sense to take advice and plan ahead, to stand the best chance of a successful outcome.
If you would like a free of charge no obligation meeting on a totally confidential basis to discuss a possible exit or sale opportunity, please contact Neil Large at Davidson Webber LLP on 01423 727211 or 07920 003796
Davidson Webber LLP has played a major role in numerous high-profile acquisitions and disposals valuing over £100 million in the last three years.
