The preparation undertaken by the armies – the testing of equipment, the old jokes, the good luck charms fascinates me. I’m a fan of historical fiction and enjoy reading about the pre-war rituals. Wherever there’s knowledge that a battle is coming, it’s accompanied by uncertainty for all participants:

1. Where are the enemy?
2. Are there many of them?
3. What are their plans?

Are you intending on selling on your business? It is often the case that same pre-battle uncertainty may accompany your plans to sell.

Here are just a few preliminary considerations for those intending to sell their businesses:

Are you and your business ready for the sale? 

1. Have you obtained tax advice?
2. Have you looked at your business from the point of view from the buyer and identified any issues?
3. Is there a need for HMRC clearance to be sought?

Will the sale be a share sale or asset sale? This will depend on considerations including:

1. The assets and liabilities of the business;
2. The type of business.

A buyer may want to structure the deal as an asset purchase as this may allow them to “cherry pick” the assets and attempt to leave the liabilities behind with the seller. The seller will usually wish to sell the company’s shares so that the business is transferred “warts and all”.

What will the due diligence find? A key part of the sale process will be the due diligence exercise. This is the process through which the buyer will seek information on all aspects of the business including information on:

1. Employees;
2. Insurance; and
3. Assets.

The due diligence exercise will seek to identify:

1. What are the strengths and weaknesses of the business?
2. How can the business be changed for the better following completion?
3. Are there any “skeletons” in the cupboard?

Is your business prepared to be poked and prodded?

Is there anything amiss?

On a related note, due diligence requires the disclosure of confidential information to a third party. This is something to be careful of and anyone to whom information is disclosed should be bound by appropriate confidentiality obligations.

If you are considering buying or selling a business and would like further information please contact any of our corporate team on 01383 721621 or by Steven Wicks saw@businesslaw.co.uk, Angus McGuire  alm@businesslaw.co.uk, Alan Stalker ads@businesslaw.co.uk.