Preparing to sell your business

February 25, 2025

Whether you have owned your business for generations or for a few years the decision to sell isn’t always easy. Once a decision is reached your thoughts will turn to finding a buyer and dealing with the sale with the minimum of fuss and delay. Whether you are selling the shares in your company or the business assets, the process can seem rather daunting. There are things you can do to help expedite the sale process and help it to run smoothly. The key is in the preparation.

One of the initial steps that a potential buyer will undertake is a legal due diligence exercise. This will entail raising questions concerning all aspects of your business.

The questions will likely be tailored to your individual business, but early preparation will mean you have the information and documents ready when they are requested. Also, if you identify any issues, then you have opportunity to take corrective action.  You should consider putting in place a confidentiality agreement before disclosing any information or documents to a prospective buyer. Clearly you would not want confidentiality information concerning your business to be misused in the event the sale doesn’t proceed.  The due diligence process can be lengthy and detailed.

Although this is by no means an exhaustive list, questions are likely to cover the following main areas:-

1)     Business and corporate structure

What is the structure of the business? Is there a shareholder/partnership agreement in place?

2)     Books and records

Are the company records, accounts and statutory books up to date and available? Is there an up-to-date asset register/inventory?

3)     Employees

How many employees are there? Are there employment contracts?  Can you produce an up-to-date schedule of employees detailing their start date, salary, holiday entitlement, benefits etc.? Does the business have policies, procedures and a staff handbook? Do you hire agency workers or self-employed individuals?  Do your employees require DBS checks or work permits?

4)     Litigation

Is there any ongoing litigation, complaints, disputes or proceedings relating to the business. If so, you will need to provide full details.

5)     Property

Is the property from where the business operates freehold or leasehold? Who owns the property? Will the landlords consent be required to assign or grant a new lease?

6)     Supplier and customer contracts

Identify your key customers and suppliers. Obtain copies of the key contracts and ensure that they can be transferred to the buyer.

7)     Intellectual Property

Do you have a record of any intellectual property used by your business? Think about your business name, logo, website, trademarks, patents, social media accounts and brochures.

8)     Tax

Has the business dealt correctly with PAYE, VAT, Corporation tax? Is the business up to date with its payments to HMRC? If you have any queries or concerns relating to tax, then will need to seek the advice of your accountant.

 If you would like further information on how we can help you sell your business please contact our team here.