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Several options are available to a company owner who wishes or needs to exit a company. Still, they all involve various issues that need resolving before a successful transaction can be reached.
Structuring the sale of the company
The first question to ask is how to structure the transaction. There are a number of ways to do this. It is possible to:
- sell shares of the company. that is the company with all its history, obligations and rights. For example, company shares are sold, change of ownership in the business register.
- sell only a specific part of the assets of the company. In this case, only the rights and obligations relating to those assets are transferred to the buyer. For example, only a department connecting to one product with its employees, contracts, and related loan obligations is sold.
- carry out the transaction as a transfer of intellectual property. For example, a software program developed by the company is transferred.
These are not the only options; combinations of different ways are also possible.
For both the buyer and the seller, the price and the way it is calculated are essential. Different approaches are possible with the transaction’s structure, and great attention to detail is required to ensure a satisfactory outcome that meets expectations.
When structuring the sale of a company, it is also essential to pay attention to taxation – different transactions are taxed differently, and taxation depends on whether the company’s seller is a private individual or a firm.
Give the process of selling your company an early start
The seller should start the preparatory activities for selling the company sooner rather than later. Preparatory activities include analysing the whole of your business activity (due diligence), correcting any identified shortcomings, or mitigating risks. This way, the whole sale process will be quicker and less time- and resource-consuming.
Involve experts to ensure a smoothly run sale process
Both the buyer and the seller likely need to involve experts in their field in the process. Legal, financial, tax and technical advisers are not unusual for all involved. Strong experts will allow the company owner to continue running the business during the sale process, adding value and proving to the buyer that it is a win-win transaction for the parties.