Dominic is the CEO of Lawpath, dedicating his days to making legal easier, faster and more accessible to businesses. Dominic is a recognised thought-leader in Australian legal disruption, and was recognised as a winner of the Australian Legal Innovation Index and recently a winner of the LexisNexis 40 Under 40 (APAC).
So you’ve decided to move on! Selling your business is an exciting, yet nerve-racking time. It is hard to let go of all the tireless hard work and effort, yet new opportunities await and it’s time to let your business go. Like us, you would want to get the best value for your business. After all, you deserve it.
Initial contemplation stage
A huge decision like this takes a lot of contemplation. Before selling your business, you have to determine if it is the market is right, is the business ready to be sold, and any potential deal breakers that may make prospective buyers into prospective nobodies.
The negotiation stage
The vendor, or party selling the business, has to disclose important and relevant information accurately to the prospective buyer(s). A failure to do so, or conducting themselves in a misleading and deceptive nature could result in a breach of the law. This includes any material trade secrets or plans that you have up your sleeve. To ensure that this information does not leak out, it is crucial that you get each prospective buyer to sign a Non-Disclosure Agreement before you reveal any information or start negotiating.
Without question, you would want to dictate the terms of the sale of your business. After all, you have built it to where it is today. To best do this, create a Term Sheet that describes the proposed terms specific to your business and hand them over to prospective buyers. This informs them of your position regarding the sale, and also kick starts the negotiation stage. Further, a term sheet is not legally binding, so you are able to adjust the proposed terms according to your wishes or the other party’s demands (should you agree) before executing a legally binding document. For more information, see What is a Term Sheet?.
The freak-out stage
OMG! This is really happening! I’m really selling my business! What?!
Executing the final agreement
Executing a final Business Sale Agreement is the most important part. The document is extensive, and you must ensure that it protects your interests as well as the other party’s. This includes detailing exactly what is being transferred, the breakdown of the valuation of your business, and any other important terms. For more information, see How to Create a Business Sale Agreement.
If you are ready to sell or buy a business, with LawPath you can now create a Business Sale Agreement in under 15 minutes.
Unsure where to start? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.
