Preparing to sell your business: why it pays to start early—and how we can help

Selling a business is competitive, and most buyers paying a market price expect sellers to present their businesses in a clean, well-organised and legally sound state. Even if buyers do not expect good housekeeping, being prepared is likely to have an impact on the ease on which a transaction completes, and its ultimate success.  

Without preparation, sellers may face:

• lower valuations: issues uncovered during due diligence such as unclear IP ownership, contract terminations on sale, employment disputes, or inconsistent financials can give buyers excuses to chip away at the price. Some buyers will be looking for such excuses so it is important not to make it easy. 
• deal delays: failure to prepare can stall or derail the transaction due to matters such as poor documentation or ownership structures.
• increased warranties and liabilities: a lack of preparation may result in the perception of increased risk which may result in wider protection being sought within the sale document by the buyer. In turn, this may make claims more like, which will in effect lead to a reduction of the price paid. 

From a legal perspective, ‘sale readiness’ involves several key components including some of the following examples:

• corporate housekeeping: up-to-date company registers, filings and board approvals
• Contract review: ensuring key customer, supplier, and employment contracts are signed, current, and do not contain clauses which may cause risk to the buyer after completion such as change of control provisions which may allow a counterparty to terminate following the buyer’s acquisition of the company.
• IP and compliance: confirming ownership of intellectual property (especially in tech businesses) by the company and compliance with applicable regulation. 
• employee and incentive arrangements: ensuring that all employment documentation exists and is fully up to date. 

Our corporate and commercial team works with business owners and leadership teams to get them ‘deal ready’ - whether a sale is imminent or five years away. 

1. Pre-sale legal audit

Our team can conduct a review of your company’s legal position, identifying potential red flags before a buyer sees them. If any red flags are spotted, they can be more easily addressed without the buyer’s prying eyes present. 

2. Structuring and tax planning

We can work with tax advisers to ensure corporate and shareholder structures are as tax efficient as possible for the sale. 

Usually, the earlier tax structuring can be completed, the better, as it can become more difficult to make changes the closer a deal gets.  

3. Shareholder alignment

We can assist with aligning shareholder expectations on a sale, and ensuring all necessary consents and rights are documented ahead of time. This can ensure that shareholders are all co-operative with the sale, and that disruptive shareholders cannot prevent or delay completion. 

4. Data room readiness

Dependant on the value of a deal and how close it is intended to occur, we can complete a dummy run of due diligence, and assist with the preparation of a well-organised virtual data room in advance of finding a buyer. Early engagement can lead to a strategic advantage.

Preparing to sell isn’t just about compliance, it is usually a worthwhile investment which increases value and reduces risk. 

By engaging with a process to prepare a business for sale as early as possible, sellers ensure they’re in the best possible position to attract buyers, negotiate confidently, and close smoothly.

Whether you’re planning to go to market this year or simply starting to think about the future, we’re always happy to help.