Seminar on Legal Aspects of Selling a Business

1. STRUCTURING THE SALE OF
YOUR BUSINESS
Your complete legal solution…
www.nevesllp.co.uk

2. SHARE SALE ASSET SALE
AGREE STRUCTURE AT
THE OUTSET
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3. SHARE SALE – COMPANIES ONLY
• Change of Ownership but no change in
Business Identity
• Contracts with suppliers/clients remain
unaltered
– but beware change of ownership clauses.
• Tax Liabilities
• Employees
• Disputes – Past, Present and Future!
Your complete legal solution…
www.nevesllp.co.uk

4. SHARE SALE – DUE DILIGENCE
• Employees
– Contracts
– Problems/Disputes/Disciplinary Action
– Salaries/Bonuses/Benefits
– Holidays
• Accounts
• Tax
• Disputes - Past, Present and Future
• Contracts
• Assets
Your complete legal solution…
www.nevesllp.co.uk

5. SHARE SALE – STATUTORY BOOKS
• Companies Act 2006
• Articles of Association
• Minutes
– AGM’s – if required
– Board Meetings – Authorising Director Conflicts!
• Registers
– Directors – General and Private
– Secretary (if any)
– Members
• Companies House Filings
Your complete legal solution…
www.nevesllp.co.uk

6. SHARE SALE – SALE/PURCHASE PRICE
• One lump sum
• Deferred element – Payment by instalments
– Security: Charges, Guarantees etc
• Earn Out element – linked to future performance
– Control
– Ability to manipulate figures
• Retention – for unknowns or potential breaches
• Reduction in Consideration
Your complete legal solution…
www.nevesllp.co.uk

7. SHARE SALE - DOCUMENTATION
Share
Finance Purchase
Documents Agreement
Tax Deed
Compromise DOCUMENTATION
Agreement
Disclosure
Letter
Resignation
of Directors/ Stock Transfer
Secretary

8. ASSET SALE - ALL BUSINESSES
• Change in business identity
• Contracts may need renegotiation
• Tax liabilities
• Employees
– TUPE
• Disputes – beware of implication by
association.
Your complete legal solution…
www.nevesllp.co.uk

9. ASSET SALE – DUE DILIGENCE
• Account history – form part of valuation
• Ownership of Assets
• Employees – full details
– Contracts
– Problems/Disputes/Disciplinary Action
– Salaries/Bonuses/Benefits
– Holidays
• Disputes
Your complete legal solution…
www.nevesllp.co.uk

10. ASSET SALE - DOCUMENTS
Assignment Contract
DOCUMENTATION
Lease/Transfer
Assignment of
Goodwill
Your complete legal solution…
www.nevesllp.co.uk

11. SHARE SALE v ASSET SALE
Share Sale Asset Sale
• Expensive • Cheaper
• Time • Completed Quickly
• Paperwork • Simpler Documents
• Tax Liabilities • No Transfer of Tax Liabilities
• Disputes • No Liability for Disputes
BUT BUT
• Tax Efficient • Tax on Disposals
• Stamp Duty • SDLT on Property Transfer
• Clean Transfer of Contracts • Contracts need renegotiating
Your complete legal solution…
www.nevesllp.co.uk