Do I need a solicitor to sell a business?

by | Sep 20, 2023 | Blog, Legal Updates, YBL Blogs

The sale of any business is typically the result of many years of hard work.

It can be a complex and emotional process to sell a business, which is why you should always seek professional advice from expert business sale solicitors. There are many legal aspects involved, and it’s vital to ensure your rights are properly protected and you can move forward with confidence.

Key reasons to use a solicitor to sell a business

1. Legal complexity

When you sell a business, you’ll suddenly encounter a web of intricate legal processes with a heap of essential documentation. These aspects play a pivotal role in ensuring a smooth and legally sound transaction. The complexity arises from the need to address various legal, financial, and contractual matters, all of which require meticulous attention to detail. This is where expert legal advice becomes crucial to navigate potential pitfalls and safeguard your interests throughout the process.

2. Contract drafting and review

Contracts are the foundation of any business transaction, and selling your business highlights the significance of well-drafted contracts. These contracts serve as the blueprint that outlines the terms, conditions, and responsibilities of both parties involved in the sale. Clear and comprehensive contracts not only provide legal protection but also help prevent misunderstandings, disputes, and potential legal complications down the line. A solicitor plays a critical role in ensuring that the contract reflects the terms you’ve negotiated and effectively protects your interests.

3. Due diligence

This is a comprehensive investigation conducted by the buyer to assess the business’s financial health, legal compliance, contracts, assets, and liabilities. Accurate representation of information during due diligence is essential to maintain transparency and trust between parties. Your business sale solicitor can assist in preparing and presenting accurate information to potential buyers.

The role of a solicitor in selling a business

In brief, instructing a solicitor in the sale of your business means they take care of:

  • Legal expertise throughout the sale process.
  • Drafting contracts and reviewing comprehensive sales agreements.
  • Protecting interests to ensure terms and safeguard the seller’s rights and expectations.
  • Mitigating risks by identifying and addressing the potential legal risks and pitfalls.
  • Personalisation by tailoring contracts to the specific sale details.
  • Thorough coverage of all sale aspects – including assets, liabilities, and contingencies.
  • Legal compliance with relevant laws and regulations.
  • Supporting negotiations by advocating for seller’s interests during negotiation.
  • Contingency clauses outlining the conditions for the sale.
  • Due diligence activities to assure transparent and accurate information.
  • Addressing employee considerations by reviewing all legal aspects of employee contracts and benefits.
  • Navigating tax implications and considerations.
  • Ensuring confidentiality by developing and enforcing non-disclosure agreements.
  • Precise documentation to guarantee accuracy at all times.
  • Dispute resolution by providing legal assistance in case of disagreements or disputes.
  • Enforceability by confirming the contract’s legal enforceability in breach situations.

The solicitor’s role is multi-dimensional and vital in securing a seamless and legally sound transaction when selling your business.

How much do solicitors charge to sell a business?

I’ll give you an example of how I work with fixed fees, as for each job I provide a bespoke proposal.

We typically start at between 1-2% of the overall deal value in calculating a baseline for fees. However, sometimes that doesn’t quite work, particularly on deals below £250,000 – so we have a minimum fee of £3,500 plus VAT for the smaller deals.

However, I’d much rather you give me a call on 0116 3667900 and have a chat about your requirements and how Steven Mather might help.

When you might not need a solicitor

While seeking legal advice and assistance from a solicitor is generally advisable when selling a business, there are certain scenarios where you might consider proceeding without one. However, it’s essential to approach such situations with caution and an understanding of the potential risks. For example, if you’re selling your business to a close family member or friend, and the transaction is relatively straightforward, you might feel comfortable handling the sale without a solicitor. However, even in these cases, having a written agreement is recommended to avoid misunderstandings.

Do I need a solicitor to sell a business?

Ultimately, the decision of whether to use a solicitor when selling your business depends on the complexity of the transaction, potential legal risks, and your comfort level with navigating legal processes.

For confidential, professional advice on selling your business, get in touch with me.

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