If you own your business then at some point you may be looking to sell the business. This may be to retire or move to a new career or take up a new business opportunity. Whatever the reason there are a few legal points to consider first.
The most fundamental question is What sort of business owner are you?
If you are a sole trader then you will be selling the business assets and goodwill. There may be a property involved – if it is leased that brings with it its own complications.
If you are a partnership then provided you all agree, then like the sole trader you will be selling assets and goodwill. If only one of you wants to retire then you will need to check the partnership agreement (which of course you have!) to see what the process is. If there is no partnership agreement then hopefully you can come to an agreement as to the terms of the retirement, though ultimately you can force a dissolution of the partnership but that is rarely in anyone’s best interests.
If you operate your business through a limited company then you have a choice. The company can sell its assets and goodwill. It will be the company receiving the sale proceeds. You will then need to extract the money from the company. Both the sale and the extraction of funds have tax consequences, so good accountancy advice should be obtained at an early stage. The other option is to sell the shares in the company. This has the advantage that as the company is continuing in the business all the existing contracts remain in place. It can also be more beneficial from a taxation point of view for the seller (again get that accountancy advice). However, a share sale can be significantly more complicated and drawn out and therefore expensive.
Unfortunately, we cannot help with what is probably the biggest problem: finding someone to buy your business at a price you find acceptable. If you get past that hurdle: does the buyer have the cash – if not are you prepared to accept payment by instalments (which comes with some risks)? If the sale involves a lease getting in touch with the Landlord at an early stage will help. Generally having your paperwork in order is going to help smooth the sale.
If you would like a “pre-sale” health check or assistance with buying or selling a business do get in touch with the team below.