Selling a business can be expensive, complicated and time-consuming, and may also have significant tax implications, so you need to plan carefully and get the right advice at an early stage. In this series of briefings, we will explain the full process of how to sell your business.
There are many reasons for selling a business. For example, if you are selling as an individual (rather than through a company), you may wish to retire, or cash in your investment to provide a nest egg for the future or release funds for new investments.
Alternatively, you may want to move out of a business area which is proving unprofitable; or sell certain assets to ease financial pressures on your other businesses; or the business may have become insolvent and have to be sold to pay off creditors.
Your intentions will affect the structure of the deal and the restrictions and potential liabilities you are willing to accept. For example:
- Do you want to dispose of the business outright or are you willing to retain an interest in it or even take shares in the buyer’s company?
- Do you want to remain involved as an employee or consultant going forward?
- Are you planning to start a new business?
If your new business is in a similar industry, you may have to delay starting it, as the buyer will probably want to restrict you from competing with the existing business immediately after the sale.
In addition, you will have to pay tax on the proceeds of the sale, so you will need advice on how to minimise your tax liability. You will also incur substantial expenses and professional fees, and may have to devote a lot of management time to the process – which can distract you from running the business during the process and could damage the business if the sale falls through.
For all these reasons, you must get the right advice and do all you can to make the sale process as smooth and efficient as possible.
Click here to read the full briefing series: Selling a business.