Auckland Lawyer When Selling a Business Ensuring a Smooth and Secure Transaction
Selling a business is a complex process. It includes a range of skills and requirements from multiple disciplines and areas of competence. These fields include a number of legal issues as well as financial considerations. Being the economic engine of the country there is plenty of practitioners, it is important to pick the right Auckland lawyer for selling a business. Choose carefully. Here are some thoughts to consider and several reasons why engaging a legal professional is essential.
Legal Expertise
Whilst selling a business is the same broad process as selling a house. In fact, most business sales are carried out using the same Sale and Purchase Agreement as for property transaction. That being said, a business sale does require a greater range of experience and knowledge. An Auckland lawyer for selling a business will need to have a good understanding of accounts, profit and loss, and balance sheets. They will also need to be able to assess a good value for a business based on those numbers.
Further, they must consider the valuation of any stock, goodwill, and intellectual property, trademarks, and other assets.
Contract Drafting and Review
As noted above, most sales of businesses use the Auckland District Law Society Sale and Purchase Agreement. This removes the potential for surprise clauses. However, there are likely to be a number of variations for each specific enterprise that is being sold. This might include restraint of trade, non-competing agreements, retaining the current management team to complete the handover, and others.
Your lawyer needs to draft these clauses for you to make sure the wording is right, and meets your wishes while not leaving the sellers exposed to unnecessary risks or burdens
Due Diligence
Due diligence is a n essential part of the process of selling a business. Amongst many activities it includes thoroughly investigating the financial data provided or to be provided to the potential purchaser. The lawyer will also make sure that there are no legal skeletons in the cupboard which will deter any potential buyers or give them grounds to reduce the price.
Having a clean, transparent business makes it easier to sell at a good price.
Negotiation Support
Sometimes a lawyer will get involved in negotiating the terms of the sale. They will have been involved in other business sales and therefore will have an insight into the value, risks, or potential of the business. They can use this knowledge to negotiate a better price for their client. This can be either directly with the other party’s lawyers or through a business broker.
Handling Regulatory Compliance
Selling a business involves various regulatory requirements. These include any tax obligations, licenses, and permits. There may also be compliance issues with Auckland Council to consider, especially if the premises have had any building or maintenance work carried out. Certificates of Compliance will be needed. Another issue is to ensure that all insurances are in place or will be terminated upon the eventual sale of the enterprise.
The new ownership of the company will have to be noted with Companies House, although the purchaser’s lawyers will also be looking at this topic.
Protection Against Future Claims
The business sale lawyer will create a clean break for the seller. They will do this by drafting provisions in the sale agreement that protects the seller from future claims or liabilities. These can range from indemnity clauses, warranties, and guarantees on the work or products of the business so that the seller is not liable for any future claims, assuming there is no negligence on the part of the seller. The last thing a business seller wants is ongoing issues and time-consuming claims when they have handed over the reins to someone else.
Confidentiality and Privacy
Confidentiality throughout a sale process is crucial. Whatever the industry, keeping mum is essential to protect the sale price and to prevent the spread of rumours about the stability of the entity.
A lawyer can protect the privacy of both the seller and the business being sold by writing non-disclosure agreements for both e buyer and seller to sign.
Expert Advice and Peace of Mind
Hiring a lawyer will provide both expert advice and peace of mind. If you think selling a house is stressful, wit until you try selling a business. The process can be overwhelming with many moving parts. Having an experienced legal professional by one’s side can alleviate stress while giving confidence that all of legal issues are being handled correctly.
If you are actively or are considering selling your business talk to an Auckland lawyer for selling a business as soon as possible. They will help you position the business for sale at the best price, while protecting you from future claims on your time or money. McVeagh Fleming has a team of experienced business sales lawyers in Auckland CBD. This is their website https://www.mcveaghfleming.co.nz/ or you can click straight to the relevant page here.