A business is no different to any other asset – there comes a point when owners start to think about its value and selling it.
Disposals are part of the natural life cycle of a business and can occur for a number of reasons:
- Succession planning for the next generation
- Disposal of non-core activities
- Realisation of value to pursue other interests
- Disputes with fellow business owner
- Management buy out (MBO)
RNS Partner Rob Smith has seen several business disposals over the past few years ranging in size from small simple arrangements to complicated deals involving seven figure sums.
“I have experienced all of the situations highlighted above over the past few years and it is certainly interesting work,” said Rob.
“Sometimes clients seem to be surprised that we need to be involved (or perhaps that we can even be involved!) in the disposal process.
“This can mean we get involved in a transaction as an afterthought, perhaps at a stage when a deal has been agreed in principle that may not work in reality, or that may give rise to substantial taxation liabilities.
“It is therefore vital that if you are thinking of disposing of your business you get RNS involved from an early stage.”
Rob said that, much like selling a house, it is vital your business is presented in the most tidy and attractive fashion and, depending upon circumstances, that process can take a period of time to achieve.
“A disposal therefore needs careful planning and preparation.
“Another common issue is that much like moving house, disposing of a business can be an incredibly stressful and time consuming process.
“During the disposal process the business will have to operate as normal so it is vital that the professionals working for you on the disposal are available and capable of taking away as much of the pressures and strains of a disposal process as possible.
“Here at RNS our considerable experience on business disposals means we can guide you through the potentially stressful process.
“We also have considerable legal sector contacts which should ensure that your “disposal team” is working together successfully for you.”
Services surrounding a business disposal would typically include:
- Reviewing deal and contracts for taxation impacts and taxation warranties
- Reviewing offers received
- Liaising with your other professional advisers to minimise “deal creep” and “deal fatigue”
- Preparation, and review of, information required with regards to any due diligence requirements
- Planning and advice in conjunction with our Independent Financial Advisers, RNS Financial Services Limited as to where to invest the disposal proceeds
- Reviewing your retirement plans from a taxation perspective
- Assisting in the deal structure and price negotiations as and when required
- Preparing and reporting on Completion Accounts
- Calculating your tax liabilities and future exposures
- Just being available as a sounding board and voice of reason when stress levels rise.
Finally, as well as disposals, RNS helps people every year acquire businesses ranging from simple small deals to seven figure sums.
If you are thinking of disposing or acquiring a business, contact your regular RNS partner or, if you are new to RNS and want to talk, contact Partner Robert Smith on 01724 842713 or email email@example.com