When you part with a business, the buyer will want a substantial amount of information from you, together with certain guarantees.
Negotiating the sale
Putting company documentation in order before a sale is agreed is always recommended. A buyer and their solicitors will want to see evidence that the organisation has a sound legal structure, that the accounts are accurate and that contracts are valid and up to date. We can help you ensure that all of your documentation is ready for a buyer to inspect and that the legal structure underpinning your business is sound.
Once you have found a buyer, their legal team will raise questions about every aspect of the business, in particular concerning financial and legal matters. Ensuring that the paperwork is in order before a buyer is found will help us answer their enquiries without delay and also demonstrate that the business is organised and well-run.
The buyer may want to renegotiate the price once they have seen all of the documentation. At Hutchinson Thomas we are experienced negotiators and you can be assured we will work hard to agree a good deal on your behalf.
Drawing up the agreement for sale of a business
The document that contains all of the details of the agreement for sale will include warranties and indemnities. It is essential that these are carefully drafted to protect your position as much as possible.
Warranties are a guarantee that the information you have provided to the buyer is correct, for example that accounts are accurate and that you have disclosed the full extent of any disputes or other problems. In giving a warranty, you are providing assurance to the buyer. If the information disclosed is later found to be inaccurate, a buyer could seek damages against you for a breach of the warranty.
An indemnity clause is your agreement as the seller to reimburse the buyer in respect of specific liabilities, should they arise. An example is any ongoing legal action which the business may be involved in. The buyer will want the seller to indemnify them so that the seller will be liable for paying damages, should they be awarded against the business.
An experienced solicitor will be able to ensure that all of the warranties and indemnities included in a sale agreement are fair and proportionate. Limits should be imposed, both financially and in terms of the time period during which a claim can be made.
Instructing Hutchinson Thomas
At Hutchinson Thomas we have in-depth experience of dealing with business sales. We will provide clear and practical advice and negotiate hard on your behalf to ensure that the agreement reached with your buyer is the best that it can be.
We will provide guidance and advice to you throughout the transaction and ensure that we are always available to speak to you to update you as to progress and to answer any questions you may have.
Hutchinson Thomas is the first law firm in Wales to be awarded the Law Society Mark of Excellence. The firm and many of our lawyers are recognised year on year in the Legal 500 publication as leading individuals in their field.
If you are thinking of selling your business and you would like to speak to one of our expert commercial solicitors, please feel free to call us on the following numbers or fill in our contact form.