Can I sell my business without a lawyer?
If you’re thinking of selling your business, chances are you’ve considered the possibility of doing so directly, and without any third-party interference. And while just getting the buyer to transfer your money and handing them the keys should be the ideal scenario, the reality is that selling a business can be anything but that.
In fact, the sale of a business asset or entity can be quite complex. You have to do your due diligence, ensure that the business is properly valued, and ascertain that the new owner will take good care of the business.
When you’ve spent years building a business, selling the business isn’t just about who pays the most. It’s about more –most importantly, the new owner’s ability to do right by the business. So how can you make sure of this? Well, this is one of the reasons why you’ll need a lawyer. But there’s more:
Drawing Up Agreement Terms
In the good ol’ days, most business deals were done pretty simply: seller and buyer simply agreed on the terms of sale, shook hands, exchanged money, and that was it.
Unfortunately, those simple ways of doing business didn’t necessarily pan out as expected; which is why most business deals now require the services of business lawyers to make sure that everything is above board.
To ensure that you’re getting a good deal on the sale of your business, you need a lawyer to not only draw up the agreements but also interpret the buyer’s terms.
Signing a non-disclosure agreement is often a part of the transfer of assets and business protection measures taken during the sale of the business.
This is particularly important if you have intellectual properties or patents that you do not want sold, used, or transferred to the new buyer. A lawyer can help you draft a bulletproof asset protection document discouraging the use of these assets.
Issues can arise during the process of negotiation and other parts of the deal. This is why the sale of your business and rights transfer is best handled by experienced lawyers.
This way, there’s little or no chance of being deceived by the buyer or tricked into accepting unfair offers. More importantly, you’ll be sure that your interests are properly looked after.
Sometimes, people buy businesses for the purposes of using them as a front. Some buy businesses –particularly rival businesses- with the intention of killing off the competition.
And they’ll do so using a third-party entity or legal team to broker the deal. So, you may not know that you’ve sold the business to a rival competitor until it’s too late.
Therefore, if someone were to just do the transaction over a handshake, they may not realise that they are selling their business to someone who has no long-term plans for it.
If you’re looking for a buyer who is above board and likely to take the business to another level, then you’ll need a specialist who knows how to run a proper background check and dig as deep as necessary to find the real buyer. A lawyer will do this for you.
If you need an experienced business lawyer who is guaranteed to look after your interests in the business deal, contact Toomey Legal today. Call 0191 605 3710 or email us at email@example.com for a free chat.
How does the process of buying and selling a business work?
Whether you’re looking to buy or sell a business, the reality is there’s a lot that goes into the process. But at its most basic, the process typically involves two parties: the seller and the buyer.
Everything else is just due process that helps both parties get what they want and desire from the transaction. But you probably already knew this and are looking for more detailed information about the process. Well, the reality is that either buying or selling a business can be quite complex –this is why there are entire books on the subject matter.
But if you want concise information, we’ll attempt to break it down here for you so you can have more in-depth knowledge about how the entire process works.
The Process on the Sell Side
Let’s start with the seller –after all, their business has to be available first before a buyer can even make an offer.
The first step is an indication of interest to sell. Basically, the seller has to indicate that they are willing to sell the business. There are various ways to do this, including word of mouth, listing the business online, or actively reaching out to potential buyers. But before a seller can do that, they have to get their affairs in order: documents, valuation, etc. Some important steps to take before listing the business is as follows:
- Have the business valued by financial experts –there can be no guesswork here.
- Ensure you have earnings reports for the last 3-5 years
- Ascertain your seller’s discretionary earnings –this is also known as adjusted cash flow or recast earnings for a financial year
- Decide if you want to do the transaction as a share or an asset sale –you’ll need to get financial advice for this
- Once the valuation is complete, it’s time to settle on a price that works for you –this includes adding all income-generating assets
- Audit or assess your business critically –have a professional come to take an objective look at the business
- Prepare necessary documents for the sale, including NDAs, offer documents, asset documents, etc
Once you have all these ready, it’s time to start getting the word out about selling the business.
The Process on the Buy Side
The buyer sees or hears about the business and checks it out. If the seller has done all of the above, the buyer can easily determine by pouring through the available documents provided by the seller.
Buyer might need the help of financial and legal experts to decode and understand the documents. If they are satisfied with what they’ve seen and heard about the business, the buyer can then make the seller an offer.
Once agreed, their various legal representatives can handle the remaining part of the process, tidy up all loose ends, and help both parties come to a satisfactory agreement. If all goes well, the business rights will be transferred to the buyer, and they’ll assume ownership. See our top tips for buying a business
Hire an Experienced Business Lawyer Today
As you can see, buying or selling a business is no small feat. Hiring the business legal team at Toomey Legal will help smoothen the process of buying or selling your business.
Our legal professionals are experienced, knowledgeable, and driven to ensure that your business transactions go smoothly. Contact Toomey Legal on 0191 605 3710 or email us at firstname.lastname@example.org for a free no–obligation consult.