No matter how much you love it, there may come a time when the right choice is to sell your business. Whatever the reason, you want to do it correctly. You want to get a fair price, and protect yourself legally, financially, and otherwise.
A few simple steps and procedures, and your UK business can be well and truly sold. Do it right the first time, and then move on to bigger and better things...your next project, your new idea, or enjoying your retirement.
Step 1: List Your Business
You can decide for yourself the how and where. Selling a business, believe it or not, is not that much different than selling anything. You can list in newspaper classifieds, on community boards (both online and in local stores and centres), online directories (both paid and free options are available), or with a business broker, who will list and work on your behalf (for a fee, of course) to find a buyer and get you the best deal possible. The choice is yours. A mix of several places, free and paid, is your best bet to get the word out that you have a thriving and profitable business ready to be sold. A few reputable business brokers in the UK include:
Consider your sale goals: whats the minimum price you would accept, when would you like to be free and clear (selling a business can often take months, if not over a year, to complete), what is the asking price (there are many different, and sometimes complicated, ways to value a business), who is your ideal buyer, and so on. Having and answering these questions are an excellent first step, and it will help you decide where and when to list your business.
Step 2: Understand Your Legal Responsibilities
A business broker will be able to help with all of this, but if youre selling it yourself, make sure you know and understand everything you need to do to transfer ownership to another individual. Some of the necessary steps include:
- Your Staff - You owe it to them to explain when, why, and how you are selling your business. In many cases, your employees are protected under TUPE (Transfer of Undertakings Regulations), which dictates how and when employees must be transferred to the new owner. Make sure you and your buyer understand it.
- Notify HMRC - You are required to inform HM Revenue & Customs when you sell your business. There is a quick and convenient online form to facilitate this.
- Taxes - You must file a final Self-Assessment Tax Return and indicate the last day you were involved with the business.
- VAT Transfer - Your Value-Added Tax registration may be transferrable to the new owner under certain circumstances.
- Capital Gain Considerations - You may be on the hook for Capital Gain Tax if you make money from the sale. Look into your obligations and possible relief available to you.
- National Insurance - contact HMRC to cancel your National Insurance contributions. Call their helpline at 0300 200 3505, from Monday to Friday during regular business hours.
Step 3: Draw Up a Legal and Binding Sale Agreement
Once again, a proper business broker can help with this, but if you dont use one, consider getting a lawyer to help with the documents. You need to be clear and explicit as to what the sale includes (and does not include), amount, timeframes, payment method, and anything else relating to the sale. Clear, precise, and specific are the orders of the day.
Step 4: Sign, Seal, and Deliver
Youve found a buyer, agreed on a price, spoken to your employees, Taken care of ALL legal requirements, and drafted a sale agreement. All thats left to do is sign, dot the is, and cross the ts. Shake hands, turn over the keys, and go enjoy the fruits of your labour.
Other Useful Links
- Businesses For Sale
- Daltons Business Directory
- How To Sell Your Business
- How Do I Value My Business?
- Business Transfers, Takeovers, and TUPE
- Capital Gains Tax Reliefs
Selling your business in the UK is a straightforward affair, with plenty of companies and firms ready to assist should you want it. Understand what you need to do, and do it. Ignorance of the law is no excuse, so ensure you have researched and understood everything involved. You dont want to get dinged - financially or otherwise - down the road.