Call us today 0115 9 100 200

Getting Ready To Sell Your Business – A Short Guide

Selling your business can be an exciting and stressful process. Being both organised and diligent throughout will help to minimise the potential stresses (and also possibly maximise the price).

It is important not to underestimate the time that will be involved in ensuring the business is ‘market-ready’. Instructing an advisory team at an early stage, including specialist lawyers, accountants and corporate finance advisers, can help avoid many common pitfalls that can cause a deal to be delayed, or fail at the latter stages of the process.

In deciding to sell your business, the key question to consider at the outset is whether it is going to be a share or asset sale. The key differences between the two options are set out below.

Share Sale

  • The shareholders sell the entire share capital of the company – essentially, a clean break.
  • The buyer obtains the whole company, including its assets, liabilities and the business as a going concern.
  • The company will continue to own the trade and assets of the business.
  • Contractual arrangements with employees, suppliers, customers, landlords etc. remain in place.


Asset Sale

  • The seller is the company itself.
  • Only certain assets and liabilities which are identified and agreed upon will be sold.
  • The seller can retain parts of the business if agreed.
  • For the shareholders to receive the proceeds of the sale, the company will need to declare a dividend or be wound up and have its assets (cash from the asset sale) distributed to its shareholders.

Once it has been decided which type of sale will occur, the management team of the company can begin preparing for sale. Some of the key things to consider/action before a sale are set out below.


Selling your business – Checklist

Before going on the market:

  • Ensure that contracts and policies are all in order and up to date (legal and accountancy reviews will be helpful).
  • Ensure that any disputes, potential disputes, complaints or any other disputes have been resolved.
  • Locate and instruct a team of advisers to assist in the sale process.


When on the market:

Put a non-disclosure confidentiality agreement in place between the company/shareholders and any potential buyers to protect confidential and sensitive information.


Once a deal has been agreed:

  • Credit check any potential buyers and validate the source of funds.
  • Agree upon the heads of terms of the deal. Such terms may include the following:

– A detailed timetable covering aspects such as when contracts will be sent, how long is to be allowed for any due diligence exercise and when completion is proposed to take place.
– Set out exactly what is being sold and what, if anything is being excluded/retained.
– Agree any proposed payment structure (including deposits or deferred consideration).
– Any fundamental warranties (promises) to be given in respect of the company/its assets.


It is important to maintain communication with your instructed advisers throughout the process. Utilising the expertise and experience of your advisers will help to reduce any disruption to the day-to-day running of the business.


If you are considering selling your business or part of it or would like advice on any other business issue, contact a member of our expert Corporate & Commercial team for a confidential, no-obligation discussion on 0115 9 100 200, or send them an email.

Posted on September 3, 2019

This website uses cookies to enhance your browsing experience and deliver personalised ads. By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyse site usage, and assist in our marketing efforts.

More Information Accept All Cookies