Top tips for buying or selling a business

By Lancashire Business View

19 Apr 2017

Buying or selling a business can be a very stressful and confusing time and the role of your legal advisors is to guide you through the process, negotiate all the terms that are necessary to protect your interests and provide clear explanations of any areas that may appear confusing.

By Jennifer Bell, associate solicitor, corporate and restructuring, Forbes Solicitors

The process itself is a complex legal area where many traps and pitfalls await unprepared victims.  Effective, tailored legal advice is essential early on in any transaction for the following reasons:

To ensure certainty. You must be clear on exactly what it is that you are buying or selling.  Once this has been established you must ensure that this is correctly reflected in any written agreement. To protect your investment, or the proceeds of your sale against unexpected liabilities.

Make sure your timing is right

If you’re selling, it is imperative that the timing of completion and the structure of the transaction is right for you.

You do not want to find, after you have completed the sale, that you could have saved a substantial amount of tax, if you had only waited six months or if you had structured the deal slightly differently. Ensure you take tax advice at the very beginning.  Changing the structure of a deal at the 11th hour can be time consuming and may weaken your bargaining position.

Get your house in order

When selling, make sure that your house’ is in order so as to protect yourself from claims by a buyer after the sale has gone through.

During the course of the transaction a buyer will carry out a large amount of due diligence in order to find out everything there is to know about your business.  If any issues or problems arise during the course of the due diligence process this can cause a delay in the transaction, but worst of all it could result in weakening your bargaining position or cause a reduction in the purchase price.

It is therefore vital that you carry out a thorough review of your business in order to identify any problems early on so that they can be resolved before a potential buyer identifies them.

Remember: If you fail to prepare you prepare to fail!!

Get protected

During the course of the negotiations a seller will be exposing all of his confidential and sensitive commercial information, such as pricing, customer lists, and trade secrets, to a buyer who is quite often a competitor of the business and who is capable of using the information for his own advantage.

It is important that a buyer recognises this and agrees not to use or disclose the confidential information.  Therefore, before disclosing any details to a buyer, the first and perhaps the most important step is to ensure that a buyer signs a confidentiality agreement (or non-disclosure agreement), as it is extremely difficult to protect information at a later stage.

Remember: Information cannot be unlearnt!

Take advice

Ideally you should take advice from the outset—even before you begin negotiations. Before you even agree the basics of the deal take advice and let your legal advisors explain the implications of all the possible routes to you.  If you don’t and you end up having to move the goalposts later on, then you risk reducing your bargaining power and in some cases reducing the purchase price of your business.

Latest news

1

Major shareholder makes Inspired takeover bid inspired-500x500.png

Major shareholder makes Inspired takeover bid

23 Apr 2025

2

Nominate your favourite family-run business in Lancashire. Thompsons meeting (1).png.png

Nominate your favourite family-run business in Lancashire.

22 Apr 2025

3

Business academies to continue for an additional year Cllr Mark Smith (r) with Top Gun Tools & Fixings team presenting Blackpool Net Zero Academy certificate

Business academies to continue for an additional year

22 Apr 2025

4

Napthens advises A Lamb Associates (ALA) and subsidiary Morham & Brotchie Partnership on their acquisition by Hawkins & Associates Richard Robinson Feat IMG

Napthens advises A Lamb Associates (ALA) and subsidiary Morham & Brotchie Partnership on their acquisition by Hawkins & Associates

22 Apr 2025

5

Six promotions at Farleys Solicitors Promotions at Farleys Solicitors

Six promotions at Farleys Solicitors

22 Apr 2025

Pc Prestonmacan Gif980x120 March
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV122 May/June Launch Event
121 Lancashire Business View Magazine Launch
Networking
21 May 2025

LBV122 May/June Launch Event

Lancaster and Morecambe College, Lancaster, LA1 2TY

08:30 - 10:30

Sub36 Networking
Networking
11 Jun 2025

Sub36 Networking

British Jewellery School, Scorton, PR3 1BA

15:00 - 17:00

Lancashire Net Zero Carbon Conference
Net Zero Carbon Social 1200px 2
Networking
18 Jun 2025

Lancashire Net Zero Carbon Conference

Crow Wood Hotel & Spa Resort, Burnley, BB12 0RT

08:30 - 13:00

Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
02 Apr 2025 - 08 Oct 2025

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 15:30

The Business Network Central & East Lancashire
LBV Hub Networking
24 Apr 2025 - 24 Apr 2025

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

Preston Freelancer Meet-Up: April
1.png.png
LBV Hub Networking
25 Apr 2025 - 25 Apr 2025

Preston Freelancer Meet-Up: April

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

People Power: Exclusive Event Series
Stay ahead in 2025.jpg.jpg
LBV Hub Seminars
29 Apr 2025 - 29 Apr 2025

People Power: Exclusive Event Series

People's History Museum, Manchester, M3 3ER

17:00 - 21:00

Planning for the future + navigating Inheritance Tax changes
Planning for the future + navigating Inheritance Tax changes for website.png.png
LBV Hub Seminars
01 May 2025 - 01 May 2025

Planning for the future + navigating Inheritance Tax changes

Stanley House Hotel, Mellor, Blackburn, BB2 7NP, Blackburn, BB2 7NP

08:00 - 10:30

A night at the races
1.png.png
LBV Hub Dinners / Balls
02 May 2025 - 02 May 2025

A night at the races

Morecambe FC, Morecambe, LA4 4TB

19:00 - 23:59

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more Lbv121 Online Graphic
Subscribe now

Weekly news bulletin