The corporate housekeeping checklist every business owner should complete before a sale

A sensible first step is to review Companies House and see what it says about your business. However, it is worth noting that some public records, including most Companies House filings, are simply a record of actions that have taken place rather than the actions themselves. Therefore, while the public record is important, the underlying documentation (which may or may not be filed publicly) is often more important.

Buyers will often compare the information held publicly against the company's own records. If directors, shareholders, people with significant control or filing histories do not align with internal documentation, questions will inevitably follow.

These are rarely deal-breaking issues, but they can create delays and raise concerns about governance standards. A business that appears well organised on paper immediately inspires greater confidence.

One of the fastest ways to complicate a transaction is uncertainty over share ownership. As businesses grow, shares are often transferred, allotted or reorganised. Sometimes the paperwork keeps up. Sometimes it does not.

Before beginning any sale process, business owners should ensure that share registers, share certificates and transfer documentation accurately reflect the current ownership position. Most buyers expect this information to be straightforward. When it is not, transactions can become far more complicated than they need to be.

Due diligence often involves reviewing the company's decision-making history. Buyers may ask to see evidence of director appointments, board approvals, shareholder resolutions and records relating to significant corporate actions.

Good records demonstrate that important decisions have been taken properly and that the business has been managed responsibly. Where documentation is missing, advisers are frequently left trying to reconstruct events years after they occurred.

Documents that were entirely appropriate when a business was first established may no longer reflect its current ownership structure or future ambitions.

Articles of association and shareholder agreements should be reviewed periodically, particularly if shareholders have changed, investment has been received or an eventual exit is being considered.

The time to discover issues with transfer provisions or shareholder rights is not halfway through an acquisition process.

The most successful sale processes are often those where the business owner has effectively conducted their own due diligence exercise before a buyer arrives.

As an owner, you should ask yourself:

• is ownership of the company completely clear?

• could we easily locate all key contracts?

• are our governance records up to date?

• do we own all the intellectual property used by the business?

• would a buyer see a well-managed company or a collection of loose ends?

The stronger the answers to those questions, the smoother a future transaction is likely to be.

Corporate housekeeping rarely attracts the same attention as growth, profitability or valuation. Yet when a sale is underway, it is often one of the factors that determines whether a deal progresses smoothly or becomes an expensive problem.

At Russell-Cooke, we can help prepare your business for a transaction by reviewing corporate records and Companies House filings and identifying potential obstacles.

Thomas Clark is a partner in the corporate and commercial team, advising clients on a wide range of matters with a main focus on acquisitions and disposals. Mark Norman is a legal assistant also of the corporate and commercial team.