When selling your business in The Bahamas, there are numerous commercial choices. You must choose how to value the company, identify potential purchasers, conduct due diligence, negotiate the conditions of the selling process, and finalize the deal. In most circumstances, you also require a written contract to record the sale.
Getting the sale process started
Perhaps a potential buyer has approached you about buying your company, or you have decided it’s time to sell. You are prepared to start the selling procedure in either case. It could be difficult to determine how much to value your company in order to get a fair price. With the aid of an accountant, go over your annual financial accounts or make some income projections. You could also do some research.
You should perform due diligence whether you list your company for sale or get an unsolicited offer from a buyer. To learn more about the buyer or purchasers, do some research on them. This might clarify concerns about their sincerity, their financial capacity, and their plans for the company when they acquire it.
Deal-making in the sale
While some business owners choose to handle the selling negotiations alone, others use the assistance of advisors or attorneys. You could need expert assistance if your company is big or valuable. You might also need assistance with the transition to new ownership, such as with property transfers and vendor contract changes. Like the price and other parameters of the transaction, the transition procedure may be negotiated.
Finalizing the sale and memorializing the sale agreement
It is a good idea to put your tentative agreement with a buyer in writing after you have done so. If the buyer later backs out of the selling process, a formal agreement will safeguard you. Additionally, it specifies exactly what you are selling and what the customer will give you in return. Business sale agreements might take the shape of an asset acquisition, a share purchase, a combination of the two, or some other arrangement. One requirement of the sale might be that you sell all of your company shares as well if you’ll be giving up all ownership in the company when it closes. Or maybe the new owner wants to purchase the assets.
You should sit down and review the agreement after your attorney or the buyer’s attorney has prepared it before you both sign it. A schedule for the transfer of ownership, including when the transaction is complete and when you must transfer assets or shares, should be outlined in the agreement. The agreement should also specify who is accountable for any severance payments and what will happen to any employees of the company.
Acquiring a buyer
A company broker will typically take the lead when it comes to finding and qualifying purchasers. However, there are some major factors to think about if the sale is conducted without using a broker:
Pre-qualify prospective customers
The majority of new business acquisitions are partially financed by outside lenders, and many deals go through because a prospective buyer is unable to secure financing after reaching an agreement with a seller. By excluding unqualified customers right away, you can not only save time but also prevent the disclosure of private data.
Keep in touch with prospective purchasers frequently
This will maintain the momentum and show the seller to be sincere.
A letter of intent (LOI)
The letter outlines the intentions of the buyers and sellers regarding the sale of the company and is a preliminary, non-binding document. Importantly, it is not the final contract but rather a step toward it. To make sure you are aware of the tax ramifications of various deal structures and your potential tax liability, work with a lawyer and an accountant.
Leave room for negotiation
Before starting a discussion, choose a low price and prepare a list of two to three possible buyers in case the first transaction fails.