Selling a family business
Corporate lawyer Michael Walby looks at three important points to consider if you are contemplating selling a family business.
There can be several reasons for deciding to sell a family business. It may be that no one is willing (or suitable) to take over, or an offer out of the blue may present a golden opportunity to sell. If you are contemplating selling your family business, below are three important points to consider:
Get your “house in order”
Any property, litigation, tax or other ongoing issues might cause delay to what is an already lengthy process. They will also give a buyer the opportunity to seek indemnities from you, or worse, to chip away at the price. Sorting out these issues in advance of a sale will help to avoid these risks, present the business in the best light, and undoubtedly make the sale process easier.
Get the right advice
You should seek early input from a business lawyer and your accountant. If you are selling a large business, I would also recommend instructing a specialist corporate finance adviser to help you find the right buyer, and to provide guidance on the sale process – it can make a real difference to the price you achieve. A tax adviser will also be able to offer advice on how to best minimise your tax liability on the sale proceeds. All of these specialist advisers are available on your doorstep, here in Cumbria.
What might be expected of you post-sale?
If your knowledge, trade and customer connections are key to the success of the business, a buyer might seek to retain you for a handover period following completion, and defer some of the sale price until the end of that period. The buyer is also very likely to seek to restrict you from competing with the business following completion, usually for up to three years.
There are many other important considerations when selling a family business. If you would like to discuss further, please do contact Michael Walby, Partner in Burnetts Corporate team on 01900 510366 or by email to firstname.lastname@example.org.
About the author
Michael Walby is a Partner in the firm’s Corporate team.
Published: Friday 23rd October 2015
Categorised: Corporate Law