Selling a Business in the United Kingdom
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by: Christopher Jones
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Word Count: 514
Date: Mon, 8 Mar 2010 Time: 12:51 PM
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Traditionally in a company sale/ acquisition the buyer and seller are each represented by separate teams of professional advisors. This arrangement often results in protracted negotiations, which can be detrimental to the interests of both parties.
Having separate advisors can be useful in difficult transactions or where there is a significant imbalance in business experience or bargaining power. Most owners of businesses for sale would undoubtedly benefit from a more streamlined and less adversarial approach.
The New Approach
Ellis Jones and Sunbelt Business Brokers have developed a unique process to complete a business sale and purchase transaction in a more effective way. The key to this system is a single solicitor who accepts instruction from both parties jointly. This avoids duplication of work and relies on the parties having the necessary business experience to negotiate the deal between themselves under the guidance of the business broker. The parties are not being advised independently, but the solicitor prepares the necessary documentation and advises the parties jointly on any technicalities. Should the need arise in respect of any specific points, the parties would be advised to take independent legal advice. Even then, the cost of such advice would be a fraction of the cost of both parties operating separately for the whole process.
The benefits of this process are:
1) The costs are greatly reduced - potentially halved
2) Saves time - No waiting for different advisors to negotiate and agree
3) More collaboration
4) Clients have more control
5) Uses the skills of the business broker
6) Better utilisation the skills of a commercial lawyer.
The business broker works directly with the seller to establish the criteria for the sale of the business. This allows the broker to locate suitable business buyers who may be interested in purchasing the business and are in a position to proceed with the transaction.
When appropriate, the business broker identifies and liaises with professional advisors, whether it is for financial expertise or legal advice. In this process the business broker works directly with the transactional lawyer, providing them with details of both parties. The transactional lawyer makes contact with each party, at a venue arranged by the business broker. The lawyer then proceeds to document the due diligence process, prepares the deal documentation, advises on the most beneficial deal structure and all the required board minutes and records the share transfers (in case of a share sale) bringing the matter to completion.
The advantage of this for the client is that they can establish a close working relationship with the business broker and the transactional lawyer, rather than waiting for multiple levels of negotiations from two sets of advisors. The business broker facilitates negotiations between the parties and any advisors. The business broker continues to monitor interactions, helps to resolve any issues that may arise and maintains the momentum of the transaction.
This process can save time, money and effort, reducing the administrative burden on all parties.
About the Author
Chrisopher Jones has vast experience in UK businesses for sale and can help you with selling a business in the UK.
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