CALGARY BUSINESS SALE LAWYER
Experience is a critical factor when selling one's business, one that cannot be taken lightly, given the value of experience on the results of your benefits divestiture. Both the legal and financial implications of your business sale are dictated in large part by whom you've chosen as your legal counsel. So as you proceed through the process of selling your business, you will greatly benefit from retaining the services of a corporate lawyer experienced in the sale of business, with their unique attributes.
As you are moving through the process, there are a multitude of considerations that you should be looking to address (far too many to be listed here and most often needing to be modified and altered to meet the specificity of your business and its sale), considerations and actions that can be best implemented with an experienced lawyer and other knowledgeable professionals:
- plan at least six months in advance to sell your business (though a longer time line is preferable)
- determine whether you and your expertise are critical to the commercial success of the business (and what needs to be done to effectively transfer those skills and knowledge)
- establish any conditions for the sale of your business regarding your involvement (i.e. do you desire to stay on as a consultant after the sale or retain some equity in the business)
- identify potential buyers that you may already know (i.e. family members, employees, competitors or suppliers)
Planning Your Exit Strategy
- consult both legal and financial (tax) advisors as early as possible in planning your exit strategy
- address capital gains tax issues to optimise the proceeds of the sale
- restructure the business if necessary and/or available to optimise it for sale
- compile and summarise financial statements for the last three (3) years (i.e. tax returns, profit and loss statements)
- identify positive business trends that will increase interest (i.e. consistent growth over the last 18 months)
- identify future potential of the business based on independent reports, industry trends and market growth
- identify areas where the business can be improved
- identify any potential obstacles to sale and how they can be solved or mitigated (i.e. licensing requirements, non-transferable skills or expertise)
- potentially retain the services of a business broker to help you plan and organise the sale of your business, if you deem such to be appropriate
Valuing the Business
- monitor the value and sale prices of similar or equivalent businesses
- identify all of the assets associated with your business (i.e. property and infrastructure, stock, established customer base, employees, supply agreements in place, trademarks, hand-over training as well as the future profitability of the business)
- identify any liabilities of your business (i.e. money owed, costs involved with equipment upgrades, repairs or maintenance required)
- consult with your professional representatives to establish an asking price
- prepare a prospectus or information package for prospective buyers including all relevant business details
Selling the Business
- determine how best to advertise your business (i.e. with a business broker, online, in business magazines, newspaper advertisements or word-of-mouth)
- meet with prospective buyers to show them the business premises, discuss the business operations and answer any questions they have in person
- while you wait for a buyer for your business, continue to operate your business as usual - do not allow it to decline
- consult your lawyer and business broker when negotiating any sale terms or conditions (i.e. price, training, transfer of leases or restraints on your activities after the sale)
- require a deposit (generally 10% of the purchase price) from the buyer to be held in trust by your lawyer
- have your business lawyer prepare the sales agreement
The key to selling your business, however, remains retaining experienced legal counsel (and other knowledgeable professionals) who is knowledgeable in the intricacies and challenges in selling businesses in their many varied forms. If you are looking to sell your business, contact lawyer Christopher R. Neufeld at Chris@NeufeldLegal.com or 403-400-4092, to get it done right.
Calgary business lawyer Christopher Neufeld is a corporate commercial lawyer with the law firm of Neufeld Legal Professional Corporation (77 Tuscany Ridge Mews NW, Calgary, Alberta) and is admitted to practice law in Alberta and Ontario (Canada) and New York (U.S.A.). Christopher's legal practice focuses primarily on business law, in particular corporate commercial transactions (mergers, acquisitions, divestitures, business purchases and sales, etc.) and business contract work. See also www.MergerAcquisitionLawyer.ca.
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