Pre-sale checklist for your business

05 Apr 2024

1. Property

If you are selling your shares in a company and the company is leasing premises, you first need to ensure that the lease is in the name of the company.

Buyers will want a good understanding of the premises from which the business operates and the terms of its occupation. You should therefore review your lease to ensure it contains acceptable terms.

If your company owns the premises from which it operates but you intend to retain the property following the sale of your shares, you will need to transfer the property to a new owner before completion of the sale.

ACTION: Rubric Law has a specialised team for commercial property matters ready to assist you. Contact Rubric here for a free consultation.

2. Employment

Ensure all employment contracts, staff handbooks, and policies are current and compliant with the latest laws. Proper documentation minimises potential claims and reassures buyers of the business's operational integrity. Include protective clauses like non-compete and confidentiality agreements for key employees.

ACTION: Need advice? Contact Rubric Law’s employment solicitors here .

3. Debt management

Before listing your business, it's crucial to assess and manage any existing debts. This includes loans, credit cards, and any other financial obligations the business may have.

For handling business debts effectively, consider consulting with a financial advisor. They can offer strategies to consolidate, reduce, or reorganise your debts, improving your business's financial standing before a sale.

ACTION: Talk to an accountant or financial advisor to review your financial records. Rubric Law can recommend trusted professionals.

4. Tax

When planning a share sale, it's essential to understand the tax implications. Tax strategies, such as taking advantage of Entrepreneurs' Relief, can significantly lower your tax liabilities, making the sale more beneficial financially. It's important to consult with a tax advisor who can provide tailored advice.

ACTION: Talk to an accountant or financial advisor to review your financial records. Rubric Law can recommend trusted professionals.

5. Secure your intellectual property rights

Audit and secure your intellectual property (IP), including trademarks, trading name of the business, patents, and copyrights. Registering and protecting IP can significantly increase your business's value and attractiveness to buyers. Ensure all IP assets are properly documented and legally protected.

ACTION:Engage with an IP lawyer to review your intellectual property assets. Rubric Law can connect you with specialists in IP protection.

6. Financial records and reporting

Ensure your financial records are accurate, up-to-date, and thoroughly organised. This includes balance sheets, income statements, cash flow statements, and tax returns for at least the last three years. You’ll need these in order before potential buyers can make an offer.

ACTION: Talk to an accountant or financial advisor to review your financial records. Rubric Law can recommend trusted professionals.

7. Regulatory compliance check

Ensure your business complies with all relevant regulations and industry standards. Non-compliance can be a deal-breaker, so it's crucial to address any issues before listing.

ACTION: Seek legal advice to ensure your business meets all regulatory requirements. Rubric Law can guide you – get in touch here .

8. Exit strategy planning

Have a clear plan for your role in the business post-sale, including any transition period where you might assist the new owner. This clarity can be appealing to buyers and facilitate a smoother transition.

ACTION: Discuss your exit strategy with a business advisor who can help you plan the best approach for your situation. Rubric Law can help identify the right advisor for you.