If you’re thinking about selling your business, the process can proceed more smoothly if the business owner has prepared their business for sale. This applies whether you’re selling the assets or the shares (which is an option if the business operates through a company).

Preparation – Due Diligence

It is advisable for a buyer to investigate the business – company that they are seeking to acquire. This “due diligence” process will involve the buyer raising written enquiries which the seller will respond to by providing written replies and copies of relevant documentation referred to in such replies.

For example, a seller will need to get together: copies of agreements entered into with suppliers and customers; copy of any terms and conditions that apply to the business; inventory of assets/equipment owned or hired; if any equipment is hired you will need to provide copies of the hire/hire purchase agreements; details of employees and copies of their employment contracts; details of pension scheme(s) in operation, copies of handbooks, trust deeds; documentation related to business premises (freehold title/ copy of lease); details of any registered or unregistered intellectual property associated with the business (copyright, trademarks, domain names etc); details of the computer equipment (hardware and software) used by the business and confirmation of whether you own such equipment or have the appropriate licences; details of any policies/procedures/registrations that apply for example in respect of  health & safety and/or data protection.

As well as the legal due diligence review, a buyer will in conjunction with the parties’ accountants, carry out a financial due diligence. Consequently detailed financial information will need to be disclosed. Eg. accounts, management reports, loans and securities in place. The extent of such disclosure will vary depending on whether you are selling the assets of your business or are seeking to sell the shares in the company.

The objective of the due diligence process is to enable a buyer to make an informed decision about the proposed purchase/acquisition. i.e. at the end of the review the buyer will have a clear idea of the assets and liabilities of the business and the financial position overall.

Are you prepared?

If you’re looking to sell your business and you received an offer tomorrow from a prospective purchaser, how easy would you find it to provide them with the information that they require? Are your filing systems up to the task? Should the documents exist but you’ve just not got around to putting them in place?

To help simplify your sale thereby reducing stress levels, get your business organised now. Regardless of any sale now or in the future, a well-run and legally compliant business should already have in place, the documentation referred to above.

If you need your existing documentation reviewed or need to get the required legal documents or further advice on selling your business assets or shares please contact us:

0207 426 0382


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