- Vidit Agarwal
- September 18, 2023
When you start a business, if it's running well, you may think to move to the next plan. The plan might be a big business idea, or you want to add something new to your business. At that point, business owners prefer to sell their business. The UK business selling process can be complex mentally as well as emotionally. It involves several legal and financial things to take care of.
Selling a UK company may involve several steps, from selling preparation to the final sale. Here you will get some information on these steps :
Purpose of selling a company
The reason for selling can have several purposes depending on the business goals and conditions. The common are financial gain, retirement, strategic exit, business expansion, change in ownership, debt management, capital infusion and exit strategy.
Required actions to sell your business
Whatever the reason you have to sell your business, you should make it easy for buyers to show. Resolve all the required issues with your company before selling it. These issues involve:
- Resolve any dispute with suppliers, clients and employees
- Prepare your up-to-date bookkeeping or accounts
- Try to keep up-to-date records of your contracts and projects
- Pass your owner responsibilities to the management team
Also See: Buy a UK VAT Registered Company
Taxes you need to pay while selling UK business
Selling a UK business means you may be subject to several taxes. It depends on the circumstances at the time of sale whether you fall under allowance. It's best to consult with a Tax expert who can help you understand the taxes you may face and the possibility of avoiding them. The taxes that might be applicable are Capital Gains Tax (CGT), Stamp Duty, Value Added Tax (VAT), Income Tax, Inheritance Tax, and Corporation Tax.
Business valuation
It is a process to evaluate the economic value of your business. Accuracy is essential as it helps stakeholders to make clear decisions. Asset-based valuation, market-based valuation, and income-based valuation are the few methods. Choosing a suitable method depends on your business and circumstances. Leadforce gives accurate information about your business evaluation and prepares it to sell for expected value.
Due diligence
The buyer usually wants to know about your business status, whether financial, legal or operational. You need to clear all the pending tasks related to these parts. Manage all the records in advance to show the buyer and make a clear picture of your business in front of them.
Also See: Streamlining UK Company Formation with Leadforce
Hire a business-selling broker
A business selling broker works as a middleman between the buyer and seller. They help to find buyers and the best deal for you. You will have to pay them as a fee for their service. If you want to save time to avoid hassle tasks like market access and negotiation, you should hire leadforce.
Sale agreement
Once finding a suitable buyer with the expected deal, the solicitor's work starts like preparing an agreement. The solicitor will help to review all the agreements and finalise all the required tasks. These agreements are purchase and sale, lease, bill of sale, and lender documents. It can also be according to the sale deeds.
