Any buyer will likely raise due diligence questions to satisfy itself as to the value of what it is buying.
Being ready to respond to the due diligence questions efficiently creates a positive impression.
Review the affairs of the business with your professional advisers well before accepting an offer so you can identify and remedy any issues.
For example, do you have signed contracts with all your employees?
How about signed contracts with customers and suppliers? Are any assets subject to charges which need to be released?
If selling part of a business, consider what is required to separate the two parts and whether any transitional arrangements are needed for shared resources.
If issues only emerge once the transaction is proceeding, resolving them may delay or derail the transaction. Preparation pays dividends.
Take professional advice
To ensure it doesn’t encounter any unexpected issues, the buyer will likely require the sale contract be prepared by its solicitors.
Drafts of such contracts are often unduly buyer-friendly and require negotiation.
For example, such contracts may seek assurances as to the condition of business premises. Well-advised sellers resist this – the buyer should obtain surveyor’s advice.
Even where assurances about the business are reasonably sought, there will likely be various exceptions to those assurances which must be disclosed to the buyer before contracts are exchanged.
Professional advice helps ensure that the disclosures required are effectively made.
Expert advice plays a vital role in minimising the risk of the buyer seeking compensation under the contract.
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