Exiting your Business
Exiting a business is a significant step for business owners, whether that involves selling assets or shares.
Whatever your reasons for selling, there are numerous issues to consider ranging from the valuation of the business, what form the sale will take and what you will do with the proceeds.
We can guide you on those issues and the sale process. As and when you decide to sell, we will help you navigate that process as smoothly as possible, ensuring you realise the best value from your investment while protecting your rights and entitlements.
How we can help with your asset or share sale?
Whether the exit involves a sale of assets or a sale of shares, we will:
- help you to negotiate and agree heads of terms;
- draft and negotiate the sale and purchase documentation (whether that be an asset purchase agreement or a share purchase agreement);
- include in the documentation appropriate limitations on your liability under the warranties and (if the deal involves a sale of shares) limitations on liability under the tax covenant (in order to reduce your exposure to claims after completion of the deal);
- guide you through the legal due diligence process which will involve replying to the buyer's legal due diligence enquiries;
- advise on the warranties about your business (which the buyer's solicitors will include in the sale and purchase documentation);
- co-ordinate the crucial process of disclosing against those warranties and prepare a detailed disclosure letter (the principal purpose of this exercise being to limit your liability for warranty claims by the buyer after completion);
- work with your accountants and/or corporate financiers so that the optimum structure is used and the sale is completed within whatever timescale is required; and
- help you to reduce the risk of exposure to claims after you have sold your business, so that you can enjoy the rewards from your years of hard work.
Where a share sale involves, for example, minority and majority shareholders all giving warranties jointly and severally, we can draft an appropriate contribution agreement.
A contribution agreement will set out the basis upon which the sellers intend to apportion between them any liability arising under the warranties, indemnities and tax covenant in the share purchase agreement.
Independent financial advice as part of our service
Unusually for law firms in the North West region, Pearson's commercial team is supported by an in-house team of Independent Financial Advisors. They can provide expert advice on how best to invest your sale proceeds to ensure a long-term revenue stream.
Dealing with director or partner exits
Director or partner exits can be amicable or otherwise. In either case, we will put in place the documentation required to properly document the exit.
Where the director or partner is also an employee, we will work in conjunction with lawyers in our employment team to implement a settlement agreement. The aim of such agreement is to negate the risk of employment related claims after the employee’s exit.
Where the director is also a shareholder, we can advise on the acquisition of their shares, whether that be by other existing shareholders, third parties or the company itself.
In each case, the overarching objective is to facilitate a clean break so as to minimise the disruption and risk to the business following the exit.
Management buy-outs and buy-ins
A management buy-out ("MBO") involves the acquisition of a company by the management team.
A management buy-in ("MBI") is similar to a management buy-out, but in this instance, the managers or a management group from outside the company lead the acquisition.
To find out more about MBOs or MBIs, click here or get in touch with Keith Kennedy.
Succession planning for businesses
Succession planning is essential to maintain the business's stability when the business owners retire or die.
To find out more, click here or get in touch with Keith Kennedy.
When a business becomes insolvent, an insolvency practitioner will be appointed to effect its sale. If you are an insolvency practitioner or considering the purchase of such a business, we can help you through the purchase procedures.
Click here to read more or contact Keith Kennedy.