After building up a business to a point of strength, many entrepreneurs will consider selling in advance of retirement or to move on to new opportunities. Once a buyer is found, the sale process can be time consuming, but there are some steps that can be taken to ensure the company is in a saleable position. and the transaction goes as smoothly as possible.
Firstly, the owner should look at the employees. The employees will stay with the business after a transfer to a new owner. The owner should ensure the employees are capable of running the business without the owner. Should key people be provided with management training? Should they be given greater responsibility?
From a legal point of view, does each employee have a written contract? Is there an up to date handbook? Are wages, holidays, pensions, and other HR issues appropriately handled and recorded? You solicitor can assist with ensuring your employer obligations are in order, so as not to discourage a potential buyer.
Your accounts should be in order. If the company has loans, look at discharging those. If there are personal guarantees, talk to your bank about alternatives. Your accountant will advise on your books and records, and ensuring tax compliance. This will be one of the closest areas of inspection by a potential buyer, so you will want everything to be clear and proper.
The company statutory registers should be in order and up to date. These are the documents that record the ownership and control of the company. In older companies or companies that have been run on a less formal basis, it can save time and money to have your solicitor conduct an assessment of the company registers prior to the sale process.
If your company owns or leases a premises, it will be important to ensure that all of the property matters and documentation is in order. In advance of sale, you can ask your solicitor to review the title documents, and to take steps to smooth any issues that may be off-putting to a buyer.
The sale of a company is a huge task, but the above steps can be taken early to reduce the time, costs, and stress involved, as well as positioning the company as an attractive purchase to a buyer.
The above is provided for information purposes and is not intended as legal advice. We, at Fitzsimons Redmond LLP, would be happy to talk to you about preparing your company for sale. Please contact us on 01-676 3257.
By Lisa Quinn O’Flaherty
Partner at Fitzsimons Redmond LLP
