The second part guides you through every important step in the sales process, from hiring a business transfer agent to the end of the business. Before the buyer asks for due diligence, you need to be ready. It is advisable to take a professional look through your books, legal affairs and other matters to ensure that there are no red flags to deter a buyer or give him too much influence in negotiations. The buyer will therefore request the holding of a due diligence. This is the process in which your buyer carefully reviews your business to verify the accuracy of these claims. It includes the terms of sale, what is or is not included in the sale price, and optional clauses and warranties to protect both the seller and the buyer after the conclusion of the transaction. Even if you have already reached an agreement on the conditions, it is essential to consult the buyer when drafting the sales contract. And be aware in your own mind of the future commitments, indemnities and guarantees you put in place as part of the agreement. A sales contract should be used by anyone wishing to buy or sell a business.
The agreement can help define details during the sale, including aspects of the business for sale (e.g.B. assets or shares). If you buy shares in a company, you buy part of all aspects of the business. If you buy all the shares in the business, you own all facets of the business. The first part looked at the most common reasons why entrepreneurs decide to sell their business. Professional advice is invaluable when it comes to preparing and completing paperwork in consultation with the buyer. Even if you`ve gotten to this point without the help of a professional, it might be worthwhile to appoint a lawyer or business transfer agent to help you get the deal across the line. Now we will stay a little longer in the last phase of the sale of your business: the conclusion of the sale. If you buy assets in a company, you are not buying the company yourself, but only one aspect of it.
This can mean a product, a customer list, or a type of intellectual property. The company or enterprise retains its name, commitments and tax returns. Before committing to one of the biggest investments of his life, the buyer wants to be sure to have what you promised. Any transaction in principle is carried out on the basis of certain statements made, among other things, about the financial health, physical and non-physical assets and reputation of the company. When a buyer accepts a loan, mortgage, or credit or credit balance, they assume responsibility for the business. Buyers can take on some, all or none of the debts incurred by the seller during the life of the business. If the due diligence process is nearing its conclusion, it`s time to conclude the sales contract with the help of your advisors. Clearly describe the exact terms of the sale, as the agreement is largely based on what was initially sketched out in the spirit of the terms. Preparing for due diligence will be easier sooner than you start. If you manage your business for exit, it means that you have carefully recorded all your transactions and have all your contracts up to date.
The process includes an inspection of your physical assets (premises, equipment, inventory, etc.) as well as all documents (financial accounts, tax documents, licenses, employee contracts, customers and suppliers, etc.). Collaboration also requires preparation, so put your documents up to date and in order and your premises in a state adapted to due diligence. In rare cases, buyers will attempt to renegotiate the price downwards, based on something that was discovered during the due diligence process. The more cooperative you are with the buyer (within reason), the faster you can close the deal and the less likely it is that a frustrated buyer will pull out of the sale. . . .