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How to GET YOUR Business IN SHAPE expansion or Sale?
CATHERINE GANNON
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CHOICES
EXPAND – how?SALE – how to max value
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VALUATION
• Historical data• Price earnings multiples• Recurring fee income• Why do they want you?
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EXPANSION
• Loan vs. Equity
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EXPANSION
• SEIS and EIS relief• Veto rights• Tag-along rights• IP
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SALE – Preparation
• Suppliers and customers• Employees and directors• Run your own due
diligence • Do you want a checklist?
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HEADS OF AGREEMENT
• Not legally binding• Exclusivity period• Important discussion areas:
- - restrictive covenants- timing of consideration
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TERMS OF AGREEMENT
• When will you be paid• Cash or shares or both• On-going responsibilities• Claw backs
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WARRANTIES
• Principle of Caveat Emptor
• Contractual statements
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INDEMNITIES
• Cap• Disclosure Letter
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How much will you be left with?
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WHAT IS ER
• Applies to first £10m of gains
• CGT charged at 10%
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ER – HOW COOL IS THAT
• Business sold for £886,000• Tax under ER @ 10% £86,410
Walk away with £789,590
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ER BASIC REQUIREMENTS
• 1 year• 5%• Employee or officer – no
minimum hours
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Any questions?
How can we help you?
Visit www.gannons.co.uk for further informationhttp://twitter.com/#!/gannons_law
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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.