Business Sales and Acquisitions
If you are looking to sell or purchase a company (or its assets) Razor Global Solutions is here to advise, draft and guide you through the process from start to finish.
From the outset of discussions, it is paramount that those selling or buying a business (or its assets) seek legal advice. Be as honest as possible throughout the process, hire professionals and protect the integrity of your business.
Share or Asset Purchase
A share purchase is then the buyer inherits the company, warts, and all. Every liability on that balance sheet will become the buyers. Whereas an asset sale the buyer can select the assets that they inherit – staff, equipment, property, database etc.
Due Diligence Process
Due diligence uncovers some of the hidden aspects of the business, and poor consideration could cost you dearly. This is the stage in the selling process where the vendor will have to disclosure information and documentation about their business to under close scrutiny.
The potential buyer should seek a comprehensive list of documents and information form the seller the request for such information is normally sought by the solicitor representing the buyer, the request are set out in a Due Diligence Questionnaire.
Proactive sellers will already have a 'seller’s pack' prepared that can be issued to the buyer during early negotiations. This pack will assist the lawyers draft and agree firm Head of Terms – setting out the objectives of the sale/purchase. It can also save time and money further down the line. If a seller gives upfront honest disclose in the early stages when agreeing the purchase price, the buyer will have less grounds for seeking a reduction later in the process.
Due Diligence - Legal, financial, and commercial
There are generally three limbs of due diligence; legal, financial, and commercial. A sensible buyer will not only look at the statutory accounts filed, but they will also want to look at forecasts, budgets, and monthly management accounts. As such seller should always ensure the financial as up-to-date and be in a position to confidently explain how the forecasts viable.
A seller will be asked for employee, client and supplier contracts, any shareholder agreements, asset registers etc. If sellers are able to prepare this documentation in advance of putting the business 'up for sale' the sale can proceed swiftly.
It is important to ensure that the buyer does not divulge any sensitive information it obtains to anyone other than its professional advisors. It is perfectly acceptable for the seller to request the potential buyer enters into a confidentiality agreement / non-disclosure agreement. This will prohibit the prospective buyer from disclosing or using the information disclosed by the seller for any purpose other than undertake due diligence for the proposed purchase. Another way to protect sensitive information is to only permit the buyer access to the seller’s management team or senior staff. Find out more here.
Avoid deal fatigue
It's always important to deal moving! Avoid ‘deal fatigue’ by instructing lawyers early, maintain communication at all times and consider having the purchase/sale pack referred to above prepared in advance of placing the business or assets up for sale.
A failure to action requests quickly or not responding to queries will result in a buyer abandoning the purchase.
Razor Global Solutions can assist with a share or asset sale and purchase of a business. We undertake the legal and financial due diligence. We identify any legal risks affecting rights or obligations of the target (e.g., ownership of property, equipment or vehicles, employment disputes, ongoing litigation, intellectual property, and client contracts).
Razor Global Solutions provides sound commercial advice as well as drafting of legal agreements, polices and documents to meet your immediate and on-going business needs. We can assist, negotiate, and draft agreement terms with everyone connected to your business from co-founders, investors and employees to suppliers and customers.
We have helped start-up and established companies with various aspects of their business from designing their logo and creating their business plan to comprehensive HR support and drafting simple to complex agreements. We can help you with whatever goals you may have, working closely with you while still ensuring you have the time to focus on the day-to-day running of your business. We can help you grow your business safe in the knowledge that your business is protected. Our teams' knowledge and experience makes Razor the best placed consultancy to help you and your business.
Get in Touch
Visit our contact us page to speak to us today, we look forward to hearing from you.