Thinking of selling a business? - Kuits Solicitors Manchester

Thinking of selling a business?

Thinking of selling a business?

7th December 2020 - Published by Kuits corporate team

Allow us to optimise the value of your business and speed up the sales process.

You may have an idea of the value of your business, but like most things in life, the devil is in the detail. Once you have an interested buyer they will leave no stone unturned to understand the real value of the business. If the buyer doesn’t like what they find, they may walk away from the purchase or they may use it as a reason to re-negotiate the price.

We can prepare your business now so you can optimise the value of the business, speed up the sales process and make it less stressful. The key is understanding what buyers will be looking for when they undertake their Due Diligence.

What is Due Diligence?

Due diligence is the process by which potential buyers scrutinise a business to establish whether an acquisition is really worth pursuing and to ensure the price is right. Often a lengthy and somewhat agonising process which can leave sellers frazzled and, if the sale ends up not proceeding, unexpectedly out of pocket.

However, it is never too early to start considering and planning for a sale. Blowing away the cobwebs and getting your house in order now ahead of pursuing any sale allows you to pre-empt and sort out potential issues before they can become show stoppers. In any event now is an ideal time to review your contracts and governance.

How long has it been since you…

  1. …reviewed your corporate governance, and statutory books?

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 procedure?

  1. …reviewed your systems and processes?

When you have worked in a business for a long time it is easy for some of the usual processes to be become a little slow or outdated without even realising.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?    

  1. …reviewed your contracts?

Whilst business often operate utilising “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, including employment contracts, supplier terms and conditions, customer contracts and legal contracts, for any anomalies or uncertainties which 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 obligation in their employment terms?

  1. …reviewed your assets, including intellectual property?

A buyer will want to know that all of 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, is 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 licensed 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?

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 easier and less stressful for the sellers.

We are currently offering a fixed price review, to help you prepare your business for sale.  Find out more here.

Get in touch with a corporate solicitor in Manchester

Please contact Corporate Partner Kirsti Pinnell on 0161 838 7847 or email

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