Contract for sale of business
Contract for sale of business
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Discussion

Nevin

Original Poster:

2,999 posts

292 months

Thursday 8th January 2009
quotequote all
I've agreed the sale of my business with about the only group of people who would actually have been capable of running it to the requirements of all existing customers and interested parties, which is quite fortunate.

Now however we need a contract to govern the sale (basically a sale share). Does anyone have or know where I could get a basic model form or pro-forma for this?

I've got a couple of share purchase agreements kicking around from my former life as a lawyer, but they're all huge things for the sale of multi-million pound businesses, so a bit more than what I am looking for.

DavidY

4,492 posts

315 months

Thursday 8th January 2009
quotequote all
Nevin

My advice, pay a commercial lawyer to draw one up, this will ensure that there are no obligations on yourself after the completion of the deal.

If you mod a previous document or crib one off the net, etc, you could well end up still be liable for all sorts of things.

Pay the cash, sleep safely!

davidy

Eric Mc

125,870 posts

296 months

Thursday 8th January 2009
quotequote all
Are you selling a business which is set up as a limited company?

If so, are you selling by:

selling the entire company

selling the business but keeping the company?

therealpigdog

2,592 posts

228 months

Thursday 8th January 2009
quotequote all
Best bet is to see a solicitor (but then I would say that). If you want something simple and are prepared to accept all the risks which come with that (or more importantly your purchasers are prepared to accept that) then it shouldn't be cost-prohibitive.

or just sell the shares on a stock transfer form - nice and simple but no protection for anyone.

PM me if you want a chat/proper quote.

Nevin

Original Poster:

2,999 posts

292 months

Thursday 8th January 2009
quotequote all
Eric Mc said:
Are you selling a business which is set up as a limited company?

If so, are you selling by:

selling the entire company

selling the business but keeping the company?
Selling a limited company. i.e the shares. Not keeping anything

Eric Mc

125,870 posts

296 months

Thursday 8th January 2009
quotequote all
That's the best option from a CGT point of view.

Nevin

Original Poster:

2,999 posts

292 months

Thursday 8th January 2009
quotequote all
Eric Mc said:
That's the best option from a CGT point of view.
My mum is an accountant and also one of the directors so she is very much on top of that sort of thing fortunately.

JustinP1

13,364 posts

261 months

Thursday 8th January 2009
quotequote all
For something like this, as much as I would love to advise otherwise, this is one of the times that a solicitor is the best way forward.

What you don't want is liabilities later on for things you never thought of, you want a clean break and for there not to be problems. For the sake of what it would cost, unless the business you are selling is worth less than a small car then I would seriously get a professional to write the contract.

They will of course have their own templates, but will tailor them to your exact situation and the specifics and things you probably never thought of.

Brown and Boris

11,838 posts

266 months

Thursday 8th January 2009
quotequote all
I was tempted to DIY recently but having had the review of the contract drawn up by the otherside I was able to agree a range of changes which [proetcred me , without upseting them too much. Importantly it protected my IPO over the product I was licensing which I was about to sign away on a 'standard contract'.

Worth the spend to get proper advice I would say on a simple risk/cost basis.

transactor

152 posts

229 months

Thursday 8th January 2009
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might be worth avoiding an outfit called RTA, just been reading about them in today's Daily Mirror

Nevin

Original Poster:

2,999 posts

292 months

Friday 9th January 2009
quotequote all
Okay, going to get someone to do it for me. If drawn up a basic heads of terms and am now trying to find someone to instruct. Its like a ghost town out there though (in Edinburgh at any case). You'd think in this market people would jump at the chance for some work, no matter how small.

Workshy Fop

761 posts

298 months

Friday 9th January 2009
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I friend of mine recommended Sheppard Wedderburn for this sort of thing. He used to work for them as a commercial lawyer.

srebbe64

13,021 posts

268 months

Saturday 10th January 2009
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Nevin - I've PM'd you the name of a very good Scottish law firm we've used many times for such contracts. As others have mentioned, PLEASE use a decent lawyer - if you don't you could live to regret it!

zadumbreion

1,049 posts

251 months

Saturday 10th January 2009
quotequote all
The thing to remember is that the solicitors are working for you. Make sure they understand how thorough / complicated you want the contract to be. You don't want to be spending 20% of the sale price on legal fees....

I've done small deals on a handshake, but larger ones did indeed require proper work from solicitors. Although even then, the two sides would often get into a very heated argument about a relatively minor point, which I and the buyer were able to sort by stepping out of the room for a few seconds.