mamoon2

Does anyone know anything about selling a business? In particular drawing up a contract?

I'm about to sell a small business that we own but i'm unsure as to who pays the costs to have a contract drawn up?

ScoobyWon't

Surely it doesn't matter as it's an expense to pass on to the tax man. I'd have thought it depends more on if you want to sell on your terms or the purchaser's.

mamoon2

My only terms are that the buyer pays me and i relinquish all responsibility.

So really it does matter as its an initial outlay

ScoobyWon't

Can you not instruct them to be drawn up and then pay on completion?

The Zohan

Speak to a solicitor; some of the considerations are suppliers you owe, outstanding invoices, staff, VAT, corporation tax, premiss, etc there is s long list of stuff to get sorted associated with most businesses

Any buyer will need to do due diligence on the business at their cost.

mamoon2

Yes, of course but as this business is being sold for a relatively low price and the business will be paying no tax as a small loss was made the cost of instructing a solicitor could become an unwanted burden. Hence trying to find out if it is the sellers or buyers responsibility to pay for this

mamoon2

The business has no debts and that includes tax/vat, no premises (online based) and no staff

The Zohan

So the buyer is buying the goodwill in effect. How about stock and outstanding invoices?
You might just get away with a good accountant sorting it.

mamoon2

No stock and no outstanding invoices. Its a website were selling

The Zohan

'Goodwill' then

BlkKnight

What about the product (service?) liability to customers to whom you have supplied in the past.

mamoon2

This will be transferred to the new owner

BlkKnight

Depends on the profession.

Architects, accountants etc retain the liability - most take out a modest insurance policy to cover it.

Also need to check into directors & officers liability for something you "may" have done in the past which will come round and bite.

PaulC72

As the seller you surely would be responsible for the contract of sale, after all if the purchaser dfid it you could end up with all sorts of special words in it that could come back and bite you on the ****.

Costs would be initially met by you but if you wanted to recoup them you would need to factor them into your selling figure :-)


IMO of course.