Stages of a business sale

Before putting your business up for sale, you need to make sure you target the areas that need to be addressed and, of course, make it attractive to a potential buyer (resolving disputes, increasing the company's net profit margin, etc.).

Finding a business broker is one of the best ways to target a serious buyer. They can, through a confidentiality letter, share information about your business so that one or more potential buyers can submit a formal purchase offer.

The buyer who is truly interested will send you an offer to purchase. This should normally contain the essential terms surrounding the proposed sale (sale of shares or sale of assets, sale price, balance of sale price, and other conditions). Your broker can help you negotiate the aspects of the offer to purchase in order to obtain the best value for your business. This offer to purchase is generally accompanied by a deposit which may be recovered by the buyer, depending on the case, in the event of cancellation of the offer to purchase (with or without conditions, depending on the case); either at his sole discretion if he discovers a discrepancy between the seller's representations and the due diligence or; if only he discovers a discrepancy that is clearly unfavorable for the business and therefore for the buyer.

The due diligence process that normally occurs after the offer to purchase allows the buyer to validate the representations made by the seller during the process that led to the offer to purchase. This step is crucial for the buyer, because it is during or after this verification that he decides whether to continue the adventure, withdraw or modify his offer. This is why the seller must avoid transmitting false information to the buyer and not be selective in the information transmitted (the "skeletons"), because obviously, the discovery of negative elements can lead to a reduction in the sale price for the seller, a change in the sales model, or even the outright cancellation of the offer. It is therefore necessary to remain vigilant.

Final contracts, including related contracts, that arise after due diligence are normally a reflection of the purchase offer as well as the negotiated agreements that resulted from due diligence. These documents can generate further negotiations and comments, as they address more specifically elements of the offer that were not always brought to the attention of the parties, for example, everything related to adjustments, restrictive clauses, etc. Normally, transaction-related documents are drafted by the buyer and sent to the seller for approval and comments.

Several follow-ups will need to be carried out in connection with the sale of your business. Follow-up regarding the corrections required in public files (Business Registrar, etc.), balance of sale price, indebtedness, release of endorsements, etc. Our legal advisors can assist you so that you can carry out all the necessary follow-ups in order to obtain everything that was negotiated and signed during the sale.