The owner of a business may decide to sell the business for various reasons. A business may be sold to enable the owner to retire. Alternatively, the strategy may have been to develop the business and grow it to a certain size within a particular time frame with a view to selling it on, realising a financial gain. The owner may be put in a position where he or she is forced to sell the business, possibly because of financial difficulties, ill health or for other personal reasons. A business may also be sold following the death of the owner or manager.

There are two methods of sale: sale of assets or sale of shares. Often tax considerations determine which is chosen.

This topic looks at how to prepare and market the business for sale, ways to sell the business, reaching potential buyers and due diligence.

It is essential to decide early on if the assets of the company will be sold by the company to the buyer or whether the shareholders of a limited company will sell their shares in the company to a new buyer — they are very different deals with different contracts and tax consequences.

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