Company Restructuring
By Conal McGarrity
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Selling Your Business?

Selling your business can realise the value and goodwill you have built up over time and provide an exit opportunity, however, if you are thinking about selling, there are a number of things that you can do in advance to help prepare and maximise the value of your business.

Below are some important considerations to take into account in contemplation of a sale:-

  • Non-Disclosure Agreement – Get any potential buyer to sign up to one. It prevents them from disclosing confidential business information to third parties, therefore protecting your confidential information should the sale not proceed.

  • Heads of Terms – Once a potential buyer has been found, it is critical to put together ‘Heads of Terms’. These are the agreed principles both parties intend to be reflected in the written Contract/Agreement. You should get advice on the preparation of this document from both your Accountant and your Solicitor.

  • Identify the value in your business – Your business assets; your business contracts/goodwill; your staff; your location and premises will all require a Valuation. Recognising this at the outset allows you to focus your own due diligence, ensuring everything is in order to realise the maximum possible value.

  • Consider the best way to sell – Get advice from a tax advisor to ascertain the most tax efficient way of selling your business, for example via an Business Asset sale, or if you operate via a Limited Company, a Share Sale Agreement.

  • Control – Be aware that key commercial trading contracts usually contain ‘change of control’ provisions which can enable the other party to terminate the contract automatically on a change of control of the business. If these contracts are significant to the business, how the counterparties are approached will need to be carefully considered.

  • Premises– Do you own any business premises or are they held under a Commercial Lease. You will have to consider whether you are selling the premises with the business if you own same, or you will have to seek the consent of your Landlord if held under a Commercial Lease. It is important to consider such consents at an early stage as it can bring any sale to a rapid halt as location can be vital to the goodwill of a Business.

  • Charges/Security – Are any of the business Assets held as security for any business borrowing? If so, you will need to speak to the specific Lending institution before any sale of those assets to obtain appropriate releases and/or consents.

  • Financial Accounts and Records – Liaise with your Accountant to ensure your financial accounts and records accurately reflect the current state of your business and are correct and up to date.

  • Intellectual Property – Does your business use intellectual property which is necessary for its function? If so, ensure that such intellectual property is either owned by the business or that a valid licence is in place. Remember, there will be goodwill in your business name so consider how to manage that on a sale, especially where it is a family name.

  • Advisors – Instruct your advisors (Accountants/Solicitors) from the outset, it can make for a much smoother process, and ultimately, a successful exit.

If you are contemplating selling your business, please contact our Dungannon office on 028 8772 2102 or our Dublin office on 01 533 7860.

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