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Gateley Holdings Plc

Smooth sale-ing: five tips for preparing your business for sale

Buyers and investors will always want to investigate a company thoroughly before they commit financially to any deal. Inevitably there will be a significant amount of due diligence and disclosure required as part of this investigation so ensuring your company is in good order before this will save valuable time when a sale or investment opportunity arises.

  1. Review your policies

The Bribery Act 2010 and the Criminal Finances Act 2017 mean that companies are under a duty to ensure that adequate or reasonable procedures are in place to prevent associated persons from engaging in bribery or facilitating criminal tax evasion. What constitutes adequate or reasonable procedures will depend on the size, nature and complexity of your business, however as highlighted in a recent case, under the Bribery Act size is not the only determining factor.

Companies, large or small, must show that they have actively considered their exposure to bribery and tax evasion, and ensure that this is documented. Increasingly, buyers are looking for assurance from sellers that any policies in place are actively brought to the attention of employees (including appropriate training) and are reviewed regularly. Any procedures in place must be enforced robustly, reviewed regularly and updated accordingly based on any changes to the company or its organisation.

The introduction of GDPR on 25 May 2018 means that all companies processing personal data must ensure that this is being done so lawfully, transparently and for a specific purpose. This extends much further than the “opt-in” emails that have been clogging your inbox, and requires companies to actively audit the information that they hold, and to consider whether they are holding and using it lawfully. Going forward buyers are likely to want to see evidence that the new GDPR principle of accountability (requiring companies to demonstrate compliance with GDPR) has been satisfied.

  1. Locate your key contracts

Companies make contracts on a daily basis, whether by telephone, over the internet, or through a board room negotiation. Buyers will want to be sure that any contracts are not unduly onerous, or capable of termination on the sale of the company (amongst other things). This means that you should endeavour to keep fully signed copies of your contracts, and copies of full sets of terms and conditions. This is particularly important for any material contracts with suppliers or customers, any lease-hire or finance arrangements, and any documents relating to any property that your company may own or occupy.

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.