1. How to plan for a company purchase or sale

2. Overview of topics Aim – share our experiences so you are better prepared to buy or sell a business or company Method – examples from practice Common pitfalls Theme - Business owners dont invest enough time to prep their companies for sale

3. Share sale New Owner C

4. Business/asset sale New Owner C Assets: IP Vehicles Leases Contracts Staff Debtors

5. Due diligence Pre-contract enquiries Involve legal team early Financial enquiries Legal enquiries Very detailed for share sale

6. Warranties and Indemnities Warranty – An assurance or promise in a contract, the breach of which may give rise to a claim for damages Warranty limitations – to limit Sellers risk Indemnity - undertaking by one person to meet a specific potential legal liability of another. An indemnity entitles the person indemnified to a payment if the event giving rise to the indemnity takes place

7. Financial Preparation Who is receiving the money? Consider Entrepreneurs Relief What impression do your accounts create?

8. Company books Share held by deceased Share transferred incorrectly Share and other registers not up to date Public record not up to date

9. Employment Employment contracts not modernised Employees have different terms from the paper contracts Private arrangements Historical issues

10. Key staff Tie in key employees Incentivise for sale

11. IPR Trade marks Patents Designs Software Domain names

12. Customer contracts Repeat income Change of control

13. Foreign assets Check foreign process Check foreign records and filing

14. The Cinderella Department Property issues are often not considered until the process is well under way. Third parties will not have the same commercial pressures to complete to deadlines. Banks? Landlords?

15. Issues common to both freehold and leasehold deals Due diligence CPSEs Asbestos reports

16. Freehold issues Who owns the property? Will new owners need a lease? Funders approval? Any occupiers?

17. Leasehold Issues Business sale or share sale? Change of control?

18. Landlords Consent not to be unreasonably withheld or delayed? Accounts References Guarantees Rent deposits

19. And finally Schedules of dilapidation

20. TUPE Transfer of Undertakings (Protection of Employment) Regulations 2006 Do not apply to share sales Do apply to business sales Undertaking Economic entity which retains its identity

21. Contract of Employment All sellers rights and duties under employment contracts are transferred to buyer at completion Any act of omission shall be deemed an act of the buyer Variations of contract void

22. Transfer and Dismissal No transfer if employee objects Employee objection will result in lawful termination of employment with compensation Dismissal can be fair if it is for an economic, technical or organisation reason entailing changes in the workforce (ETO reason)

23. Employment Information Supply of employee liability information To be supplied at least 14 days before transfer Information regarding measures

24. Employee Consultation Elect Representatives Consult Representatives The fact of, date for and reasons for the transfer Legal, social and economic implications of the transfer Sellers measures Buyers measures

25. Post Transfer Compromise Agreements Note continuity of employment is not broken Subsequent changes to employee contracts No specific time limit where changes are transfer related

26. Buyer pressure Buyer can apply pressure during buying process Price can be suppressed Buyer can lever other concessions Process can be delayed Costs will be increased

27. Business lawyers adding value