get your business in shape: explansion or sale

How to GET YOUR Business IN SHAPE expansion or Sale?

CATHERINE GANNON

CHOICES

EXPAND – how?SALE – how to max value

VALUATION

• Historical data• Price earnings multiples• Recurring fee income• Why do they want you?

EXPANSION

• Loan vs. Equity

EXPANSION

• SEIS and EIS relief• Veto rights• Tag-along rights• IP

SALE – Preparation

• Suppliers and customers• Employees and directors• Run your own due

diligence • Do you want a checklist?

HEADS OF AGREEMENT

• Not legally binding• Exclusivity period• Important discussion areas:

- - restrictive covenants- timing of consideration

TERMS OF AGREEMENT

• When will you be paid• Cash or shares or both• On-going responsibilities• Claw backs

WARRANTIES

• Principle of Caveat Emptor

• Contractual statements

INDEMNITIES

• Cap• Disclosure Letter

How much will you be left with?

WHAT IS ER

• Applies to first £10m of gains

• CGT charged at 10%

ER – HOW COOL IS THAT

• Business sold for £886,000• Tax under ER @ 10% £86,410

Walk away with £789,590

ER BASIC REQUIREMENTS

• 1 year• 5%• Employee or officer – no

minimum hours

Any questions?

How can we help you?

Visit www.gannons.co.uk for further informationhttp://twitter.com/#!/gannons_law

This information is designed to provide a summary of the issues addressed. Therefore, it is not intended as a detailed commentary on the relevant law and any comments made should not be acted upon without first taking specific legal advice.