Sale of a long-established company is a demanding and lengthy process, which, however, can be significantly simplified. We'll talk about how to do it below.
When to sell, preparations
For most of our clients, according to their communication, the most difficult decision is to sell their long-established company. But it is certainly good to choose an appropriate moment at the beginning, both according to the situation on the market and according to the situation in the company itself. If possible, we recommend waiting for the right moment. The situation on the market cannot be influenced that much, but the situation in society can. We definitely recommend going through accounting and contracts with suppliers, lessors, liabilities and receivables, checking patents and trademarks, etc.., so that you know everything about their condition and solve the problems, so that nothing surprises you during the sale itself, which could endanger the transaction or reduce the selling price. At the same time, already at this stage, we recommend contacting experts - especially lawyers and tax advisors.
How to find a buyer
If you have not yet selected a suitable buyer, we recommend casting your nets. Marketing services can normally be used, direct competitors can be approached or special M&A networking events or specialists can be used, who specialize directly in finding investment opportunities.
How to protect confidential information
An NDA, or Non-Disclosure Agreement, serves to secure confidential information. In the case of selling a company, it is necessary to communicate a number of sensitive information to potential buyers and through NDAs ensure that they are not misused. We recommend not to underestimate this, as it could happen that the most valuable - know-how, etc. - will be revealed and, in the worst case, your company will become worthless.
Due diligence,
Due diligence is a process in which a complete analysis of the company is prepared, so that the buyer has an accurate picture of the purchased company and can thus better evaluate the risks and benefits arising from the transaction. The provision of information is practically carried out through the data room (physical x virtual).
3 types of due diligence are usually performed:
- financial and tax
- legal
- operational (technical)
Purchase contract
Contracts are also chosen according to the type of sale:
- "SPA" - share purchase agreement - agreement on the transfer of shares, or shares,
- "APA" - asset purchase agreement - contract for the transfer of individual assets, or perhaps
- "EPA" - enterprise purchase agreement - plant transfer (sale) agreement.
The above-mentioned contracts are the most common, but we may also encounter others. However, all contracts usually contain the identification of the parties and the subject of the contract, the purchase price and terms of payment, warranties and representations and possibly other conditions.
At the same time as the purchase contract, a contract on the custody of the purchase price and the terms of its payment is also concluded.
Projects
Now only what is agreed in the contracts is put into practice, i.e. in particular payment of the purchase price, transfer of the company, changes in the commercial register, transfer of the company to a new owner, notification of the change of owner to contractual partners and banks, etc.
Source: leagle.one
Do you need advice on selling a company? Are you considering selling your company but don't know if it's the right time? Or, on the contrary, are you going to buy the company? We will advise you on everything!
JUDr. Ing. Jan Vych, attorney and partner
