Home / Is your business “in order” to sell?
22nd April 2025
Helen Mather, Partner
Some things you should consider are how long it has been since you…
Planning early and addressing any potential buyer concerns, often means that when you come to sell your business or company it will be a more attractive prospect to a potential buyer and that the sales process will be smoother and less stressful.
During a sale of a company, business, or assets, due diligence is the process by which potential buyers scrutinise a business to establish whether an acquisition is worth pursuing and to ensure the price is right. Often a lengthy and somewhat agonising process that can leave sellers frazzled and, if the sale does not proceed, unexpectedly out of pocket.
It is never too early to start considering and planning for a sale, think of blowing away the cobwebs and getting your house in order ahead of pursuing any sale, allowing you to pre-empt and sort out potential issues before they can become showstoppers.
A buyer will want to know that all the assets (including machinery, vehicles, and property) are owned by the business or company being bought, rather than a connected individual or unconnected third party. For key assets that are subject to a hire-purchase or lease arrangement, are there any restrictions on assignment of the agreement? Will a change of control of the company be an event of default?
Where a business uses trademarks or patents, a buyer will be keen to establish the IP is owned by and registered in the name of the company or business being sold (with any and all registrations and associated fees up to date) or has been formally licenced to it. Have any third-party consultants (including website designers) assigned IP rights to the Company? Do any IP licences have change of control provisions?
When you have worked in a business for a long time it is easy for some of the usual processes to become a little slow or outdated without even realising. Efficient and up to date systems can have a positive impact on your business and the ease with which you can sell it. Do you produce monthly management accounts in accordance with best practice? Are you complying with GDPR requirements?
Whilst businesses often operate using “standard contracts” the key terms of these contracts, together with any other contracts, will still be considered by any buyer. It is worth checking your contracts of employment, supplier terms and conditions, customer contracts, and other contracts, for any anomalies or uncertainties that could be perceived as potential problems from a buyer’s perspective. Do you have terms in place with your main customers/suppliers? Do they have change of control provisions? Do your key employees have appropriate restrictive covenants/confidentiality obligations in their employment terms?
When you sell shares in a company, a buyer will need to establish that you have good title to those shares, and there are no surprises lurking in the share history of the company. Are the company’s filings up to date? Do you have the company’s statutory books and registers? Have they been kept up to date? Does the share capital recorded at Companies House match the share capital detailed in the company’s statutory registers? Has there been any allotments, reductions, or buybacks? If so, have these all been dealt with in accordance with relevant legal procedures?
Kuits can assist with preparing for and selling your company, business or assets – get in touch with the Kuits Corporate Team today if you are interested in selling or getting your business “sale ready”.