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A business sells well when it has been prepared months in advance. That is where the price is decided, and not at the signature.
Between the moment a director starts thinking about selling and the moment the price is banked, rarely less than a year goes by. What is done during that period — putting the legal position in order, choosing the ownership structure, preparing the documentation — weighs more on the net proceeds than the negotiation itself.
We act for sellers and buyers on transactions in the region, alone or alongside the director’s chartered accountant and wealth management adviser, from the first costing through to the post-closing formalities.
Twelve to eighteen months ahead, we clear away what due diligence will bring to light: related-party agreements that were never approved, loosely drafted leases, contracts with no change-of-control clause, dormant employment tribunal claims. Every problem headed off is one discount fewer.
On the buyer’s side, we carry out the legal, employment and contractual review of the target, rank the risks and translate them into clauses: a price adjustment, specific warranties, conditions precedent — or walking away altogether.
The sale agreement, conditions precedent, the closing timetable, a price adjustment based on interim accounts, an earn-out: the document settles who bears what between signature and the actual transfer of control.
This is the heart of the negotiation. Cap, threshold, duration, exclusions, the treatment of tax and employment liabilities, security for the warranty itself: we draft or argue over every parameter, whose effect is measured in years after the sale.
Where the transaction covers the goodwill and not the shares, the formalities and the tax treatment change entirely. We cost both options before choosing, because the difference between them is rarely neutral.
Setting up the acquisition holding company, dealing with the banks, the agreement with the financial investor, the management package: we make the structure safe and check that it remains sustainable if trading slows.
Donation-partage of shares — a lifetime gift divided between the heirs — a Dutreil pact, the splitting of usufruct and bare ownership, governance for the next generation: succession is prepared with the notaire and the chartered accountant, and turns as much on family relations as on tax.
Contributing your shares to a holding company before selling them allows the tax on the capital gain to be held over, provided the reinvestment obligations are met. The scheme is effective but closely watched: it requires a timetable that is kept to and supporting documents that are retained.
The right moment
A related-party agreement regularised twelve months before the sale is a formality. Discovered during due diligence, it becomes a line of negotiation on the price.
The subject is the same. It is when it is dealt with that makes the cost.
How we work
You set out the situation, we say frankly whether we are the right people and what the work would involve. No commitment at this stage.
It describes what is done, what is not, the basis on which fees are calculated and the timetable. Nothing starts without your written agreement.
One lawyer holds your file; each question is dealt with by whichever of us handles it every day. You have only one person to call.
Formalities, filings, deadlines: the firm takes over and keeps you informed until the file is closed.
Frequently asked questions
A share transfer passes the company on together with its past, which is why the warranty and indemnity matters so much; it is more favourable to the seller in tax terms. A sale of goodwill insulates the buyer from the past but bears heavier registration duties and leaves the seller with a company to wind up. The choice is a matter of figures, not of assumption.
Allow six to nine months between the first serious contact and payment, plus, ideally, twelve months of preparation. Sales pushed through in three months are usually paid for with a discount or with a heavier warranty.
It compensates the buyer for liabilities originating before the sale that had not been disclosed: a tax reassessment, an employment tribunal claim, an unrecorded debt. It does not cover the future performance of the business, nor the risks expressly set out in the schedules.
It requires a trading activity, a collective undertaking to retain the shares followed by an individual one, and the holding of a management role. It exempts three quarters of the value passed on. Companies with a mixed or asset-holding activity need to be looked at beforehand, often with the notaire.
Yes, and it is done all the time: the debt is built into the valuation, generally by moving from enterprise value to equity value. The difficulty lies rather in the security given by the director and in the acceleration clauses in the loan agreements.
In businesses with fewer than two hundred and fifty employees, prior information is due two months before the sale, subject to exceptions. Failing to give it no longer voids the sale but exposes the seller to a civil fine. The form of that information, and proof that it was given, have to be organised.
Often: vendor finance, an earn-out indexed on results, part of the price held in escrow to back the liability warranty. Each arrangement calls for security of its own, failing which the seller becomes an unsecured creditor of their buyer.
Practice areas involved
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