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Help, I’m selling a business!

Part 1 of 5

By Aaron Chan DE Property and Commercial Lawyer.

Selling a business can be a complex and rewarding opportunity, although there are many things you need to consider. From the initial preparation to the final transaction, it’s imperative you know the basics. It’s important that you consider:

1. Obtain Advice!

Working with an effective solicitor, an experienced agent and a trusted accountant will help to ensure that your sale process is handled smoothly and that you are legally protected, and able to maximise your sale price.  An experienced solicitor can ensure that you are legally compliant with all your legal responsibilities and disclosure requirements, and ensure that your contractual documentation is drafted clearly, so as to avoid disputes and issues in the future.

Similarly, if you have not yet engaged an agent or accountant, we can assist you by introducing you to our integrity partners, who we trust to look after you and get results.

2. Price

Next, you will want to determine the worth of your business to make sure you don’t price it too high or too low. Speak to your accountant, financial advisor or an experienced registered broker to get a valuation.  Commonly used methods for valuation include:

  • Return on investment (ROI);
  • Asset Value; and
  • Market value.    

3. Confidentiality

When selling a business, it is not uncommon to receive applications from non-genuine buyers. They could be competitors, suppliers, employees or clients trying to find out who is selling. Before giving your business information pack to potential buyers, ensure they sign a confidentiality agreement!

4. Intellectual Property

You should consider if you are going to sell the business together with its business name, website, contact number and social media accounts. If you are, your solicitor must clearly state the terms on the contract of sale and specifically state that these assets are included in the sale.

5. Employees

When you sell your business, your employees will either:

  • Transfer with the business to the new owner; or
  • End employment with the business.

Organising employee entitlements is a nuanced legal and accounting task and needs to be clearly dealt with.

6. Handover Process

After settlement occurs, there is usually a transition and handover process. You’ll need to plan this process well in advance of the actual handover, usually in consultation with the Purchaser.  The time period, extent of assistance and other terms of the handover should be clearly provided in the Contract to ensure an effective handover without confusion or conflict for both parties. 

Selling a business is time-consuming and for many, an emotional venture. The help of professionals can ease the burden. 

Are you ready to sell your business? Are you thinking about selling your business? Contact Aaron Chan for a discussion today.