10 steps to maximise the value and saleability of your business – Step 9
In our penultimate blog we will discuss legal issues in your business, and the importance of tackling them.
Step 9 – Tackle problems that may lead to legal disputes or compensation claims later. Make sure you are fully compliant.
Many business sales fail at a late stage because of a number of seemingly ‘minor’ details, which accumulate to create higher risk for the buyer – higher risk for them means a lower deal price for you.
The details that come out of the legal and financial due diligence process can mean the deal price you agree upon early in the sales process on is later lowered.
We’re talking about operational issues left unresolved that could become a compensation claim or legal dispute in the future for the buyer. Questions that you need ask include: Are all your shareholder agreements as they should be? Are you compliant on all legislation such as Health & Safety, the Environment, Data Protection, Copyrights? If not, you should be.
Have you any employee looming or outstanding, or potential claims from customers or the public? Are all your contracts of employment correct and up-to-date? Are your trading terms and conditions robust? Has the business any future pension liabilities or potential claims for unpaid taxes?
These are questions you need to answer and put right to ensure you don’t have any ‘skeletons in the closet’ that could upset a potential deal. If these can be addressed before you put the business on the market, you are more likely to sell, and less likely to face a warranty ‘claw-back’ in the future.
In the final instalment of our 10-blog series, we will discuss the importance the company making a good first impression.