Selling a Business
Selling a lifetime’s work can be a daunting prospect. However, here at JCP Solicitors, we do it every day. There are some events in life when you need to feel that you are in safe hands.
Business sales require careful planning and an experienced professional to guide you through the process. If things go wrong when it comes to sensitive commercial negotiations, timings or important financial decisions it can cost you time, money and unwelcome stress.
Our dedicated team of specialist solicitors have advised on the sale of many businesses over the years – some of them well known and some of them much smaller, but each equally as important to us.
We can help
We have one of the largest dedicated and experienced commercial teams in the region and have advised on business sales of all sizes (from multi-million pound sales of major undertakings through to sole traders) and across a range of sectors, including:
- Retail - shops, petrol stations, post offices
- Leisure and hospitality – hotels, caravan parks, booking providers, health and fitness
- Logistics and transport
- Software and IT
- Waste and recycling
- Mining and aggregates
- Professional services - such as accountants, IFAs and even other solicitors firms
- Care homes
- Healthcare – dentists, pharmacists and GPs
We can advise you and guide you through each stage of the sales process from start to finish. To speak to one of our specialist business sales solicitors, get in touch with a member of our team using our staff contact details below or use our Live Chat facility which is available 24/7.
- Chris Davies
- Director & Head of Healthcare
- Betsan Powell
- Director & Head of Commercial Services
- Michael Williams
- Director & Joint Head of Corporate
- Shaunna Rees
- Associate Solicitor - Corporate Commercial
- Steve Penny
- Consultant - Commercial Services
- Maria Kerrigan
- Legal Secretary - Commercial Services
- Rhianydd Llewellyn
- Associate Solicitor - Corporate Commercial
- Anthony Poole
- Trainee Solicitor - Corporate Commercial
Discussing your objectives at the outset
Understanding what you want to achieve and your timescales for completing the sale are key to a successful transaction. We will listen to what you want to achieve and guide you through the sales process at the outset to ensure that you receive the maximum value for the sale.
It is important to get your business in the best shape for a sale to allow you to realise the best price possible. We will liaise with your tax advisers and accountants to ensure that any pre-sale tax planning is implemented in good time. Depending on how your business is structured you may also need to consider:
- Whether the business’ assets are to be sold or (in the case of a company) the shares in the company are sold.
- Whether any part of the business needs to be ‘hived off’ before a sale can take place or whether certain assets need to be extracted prior to a sale.
- Whether there are any contractual or regulatory issues that need to be dealt with in advance of a sale. These could include consideration of the need to transfer permits/licences, whether landlord’s permission is required to assign a lease to premises or whether there are change of control provisions in key commercial contracts.
- Are your records in good order and up to date?
- Whether employment contracts are sufficiently robust.
- The extent to which you involve management and other employees and engage with the workforce in advance of a sales process.
- If there are any skeletons in the closet that need to be ‘turfed out’ to avoid any issues with a buyer. Doing this pre-sale can make the sales process much smoother and avoid the need for you to provide indemnities to a buyer in respect of any potential issues.
Assisting you to negotiate terms with sales agents
Sales agents often drive a hard bargain not only with a buyer but their own client. We can advise you on what is reasonable to expect from a good sales agent.
We will prepare a ‘confidentiality agreement’ or ‘non-disclosure agreement’ (NDA) on your behalf. Maintaining confidentiality throughout the sales process is often of paramount importance to a seller. The very fact that a business is placed on the market for sale is often commercially sensitive and it could be damaging if customers, staff or employees find out about a potential sale before a binding deal is agreed. In addition as part of the sales process you will be required to provide information in relation to your business to the buyer and its advisers. A well drafted confidentiality agreement or an NDA can ensure that confidentiality around the whole process is maintained.
Heads of Terms
Once a sale is agreed it is usual for the parties to enter into a set of ‘heads of terms’ to record key commercial terms in advance of legally binding documentation being prepared. Heads of terms make clear the parties’ expectations around key commercial terms. We will prepare a detailed set of heads and negotiate their terms with the buyer and its advisers.
One of the key stages in a business sale for a buyer is undertaking due diligence on the business it is acquiring. We will assist you to respond to due diligence enquiries from the buyer and their advisers and host of a virtual ‘data room’ to allow all parties to access relevant documentation with appropriate safeguards being put in place to prevent misuse and unauthorised access.
Sale and purchase agreement
The sale and purchase agreement is a legally binding document which will set out in detail the terms of the sale. Typically this will be prepared by the buyer and its advisers and will include details of:
- What is being sold (assets or shares)
- The price payable by the buyer and how it is to be paid e.g. any earn out mechanism or consideration that is payable at a later date.
- Any security to be provided by the buyer for any deferred consideration.
- Any restrictions on you competing with the business you have sold following completion.
- Warranties and indemnities from you to the buyer in relation to the business being sold. Warranties and indemnities provide a buyer with contractual rights of recourse against you as a seller if there is a problem with the business arising out of how it was run prior to completion. Warranties and indemnities are often the most heavily negotiated part of a sale and purchase agreement. We will review the terms of the warranties and indemnities with you, negotiate them on your behalf, agree appropriate limitations on liability and prepare a ‘disclosure letter’ to qualify your liability under the warranties.
- The terms of the ‘tax deed’ or ‘tax covenant’ (in the case of a company sale) under which a seller is required to provide the buyer with protection against historical tax liabilities.
- Other obligations of the parties in relation to the sale e.g. post completion assistance, confidentiality, etc.
In many cases a buyer will want to retain the benefit of your experience following completion and to retain your services for a period of time, either as an employee or consultant. We will advise you on the terms of any employment contract or consultancy agreement and negotiate it on your behalf.
Dealing with completion
We will help guide the process from start to finish and execution of all necessary documentation for the transaction.
Speak to our Business Solicitors in South Wales
To speak to our expert solicitors for buying and selling businesses in South Wales, please contact your local JCP Solicitors office:
To ask a quick question or arrange a call back, use our simple contact form to make an enquiry.