Shape and position your business in preparation for an efficient sale
Ensure that terms, contracts and shareholders’ agreements are clear and agreed
Understand and negotiate key sale documents and provisions dealing with the apportionment of risk including confidentiality, exclusivity, warranties, disclosure letters, seller limitations, restrictive covenants, payment terms and security
Negotiate your own or others’ exit from your business
Set terms for retirement, redundancy and any end-of-employment payments
Agree ongoing shareholding arrangements
We were acting for Peter, who was retiring from the business he had set up 30 years before. One of Peter’s employees, who already held some shares, was purchasing the business; an exciting and emotional time for both of them. Funding was tight, so Peter’s accountants had helped structure the transaction and the initial heads of terms. Peter’s shares were to be partly purchased by the Company and partly by the employee. A significant proportion of the purchase monies were to be paid over a two year period.
The company law issues were complex but, by working closely with Peter’s accountants, we were able to negotiate an agreement that:
– fitted both sides’ needs both commercially and from a tax perspective; and
– provided additional protection for the money that Peter was not being paid on completion of the sale.