Whether you are buying or selling a business, ensuring you understand the process and gain legal advice is key.
You may have decided to sell your business due to personal reasons perhaps a family relocation, divorce, illness or retirement or maybe it’s just a lucrative time to sell in the business’s lifecycle. Whatever your reason, and whatever the size and worth of your business, you will no doubt have invested a vast amount of your time, effort and finances to make this a successful operation – and you will therefore want to see a good return on this investment.
If you are acquiring a business for the first time, it is imperative that you have a good understanding of the relevant market and both the financial and operational implications of the purchase. You may need to rely on us to ensure the sale price of the business is agreeable in line with market values and that any licences, stock and assets are all considered within the sale process.
The Process
It is important to gain legal help with buying or selling a business as the process is a complex field to navigate. Even before an initial offer can be considered, sufficient market research and business analysis must be carried out by both parties to ensure the value of the business can be considered agreeable. This can include monitoring its market position, the business plans and any future projected profits and the values of stock or assets.
Once all relevant information has been agreed by both parties and confirmation of business ownership or the financial position of the buyer has been sourced, then we can move onto negotiating the terms and value of the sale.
Documents and Due Diligence
During the sale, a number of documents will be drawn up including Heads of Agreement, Legal Sale and Purchase Agreement.
These can seem complicated, but these documents all form part of the legal sale process and will include information on the business i.e. the sector in which it operates, how long and where it has been trading and if transference of employees is to be included. The documents can also include information on the business premises, any financial implications on rent and rates and the financial reports of the business including visibility on profit and loss, cashflows, asset values and debts. Purchase Offers and Payment Terms will also include exclusivity and confidentiality agreements.
The practice of Due Diligence will also be carried out. The term Due Diligence relates to the searches performed to ensure all legal, commercial and financial implications relating to the sale have been covered.
The Completion
Finally, the sale can be completed and will be finalised by both parties’ solicitors. This process includes creating the Sale Agreement, confirming any tax to be paid and the transference of any documents for relevant licences, leases and client contracts etc.
Seeking our legal help with buying or selling a business will help rule out any costly errors and oversights. To speak to one of our commercial property solicitors in Essex today, please contact our team of professionals here at Hook and Partners.
