Thinking of Selling your Business? Plan for Due diligence
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Familiar with the word but not knowing what entails? Due Diligence is a process designed to help your potential and prospective buyer to identify certain aspect of the business as well as problems which need to be covered in a sale agreement, and any consents required for the transaction to take place...
you would like to discuss any issues in this article, please contact us on 01366 387672 Usually Buyer(s) will be interested in:
The trading position of the business – e.g. key contracts and clients portfolio, debtors, creditors and capital commitments
Onerous obligations – e.g. long term contracts involving high payments
Ownership and condition of assets – e.g. title to land, the terms of any leases, the condition of stock, licenses, etc.
Employees – e.g. employment terms, salary payments, pensions and other benefits
Litigation – e.g. disputes with customers or creditors or claims by employees
Taxation – e.g. tax arrears or disputes with HMRC
IT and intellectual property issues – e.g. computer contracts and the right to use software or trade marks
It is important to check first the Buyer is a genuine interested party as due diligence is time-consuming but a necessary process for the seller as well as the buyer, particularly if the buyer insists on a detailed investigation. It also helps if you have organised your paperwork in advance so you are ready to answer questions or if you don’t have time it is worthwhile investing in the right help to guide you through the process
If you need help with any business issues or like further information or to discuss the topic in this article please contact us