BUYERS GUIDE TO THE BUSINESS SALE PROCESS

The broker has obtained information from the seller for the marketing of the business and the conditions of sale (business, seller and landlord requirements) to evaluate potential buyers. He has probably received information from you regarding your ability to fund the purchase, your experience and enthusiasm for the business. You will probably have visited the business and met the owner before deciding to put in an offer.

The broker will arrange to meet with you to draft and explain the Offer to Purchase document. A standard document is used that generally covers the needs of all parties to the agreement, but as it will be your offer to the seller you may amend it as you wish as long as it remains legal and fair.

If your offer falls within the mandate given to the broker by the seller, your written offer will be presented to the seller. The broker will also brief the seller on your suitability as a buyer and explain any clauses or suspensive conditions included in your offer.

The seller has the options to:

  1. Accept the offer before the expiry deadline set by you;
  2. Reject the offer outright; or
  3. Return a counter-offer to you. In this case your original offer will be superceded by the counter-offer.

You can either accept or reject it. You are free to submit further offers if you so choose. If you do, remember the conditions the seller found to be non-negotiable.

Once the seller has signed acceptance the offer becomes an Agreement of Sale subject to any suspensive clauses included. The broker will notify you immediately of the acceptance of your offer.

You will usually need to pay a deposit into trust within a few days of concluding the agreement.

Suspensive conditions normally comprise:

Obtaining of loan funding
Approval of the franchisor (if applicable)
The landlord accepting you as a tenant (usually after credit/criminal checks)
Successful due diligence investigation. This is important for you and if discrepancies are found you can amend or cancel your offer
Once all the suspensive conditions are achieved you get together with the seller and broker to plan the handover of the business

Once all the suspensive conditions are achieved you get together with the seller and broker to plan the handover of the business

  • Transfer of liquor licence
  • Transfer of the telephone service
  • Application for a creditcard terminal
  • Transfer of TV and DsTv licence
  • Transfer of SAMRO licence
  • Transfer of POS licence
  • Transfer of vehicles
  • Buyer registration as VAT vendor, if required
  • Obtaining a tax clearance for the seller, if required
  • Conclusion of the lease and payment of the deposit to the landlord
  • Establishment of the business legal entity (CC, company, partnership as applicable)
  • Handing over of staff employment contracts and vacation / sick leave records and conduct records
  • Notification to Dept of Labour, SARS and local Municipal authority and compliance with any licencing or inspections
  • Hand over of client lists, preferential supplier lists, maintenance contracts and any other business intellectual property
  • Stocktake and payment thereof
  • Planned removal of equipment not being sold with the business
  • Cancellation / transfer of business insurance and security contracts
  • Notification to all suppliers and finalization of accounts
  • Registering of new owner with suppliers and leaseholders
  • Sorting out the keys for the premises
  • Closing or transfer of debtor accounts
  • Registration as employer for UIF, PAYE and Dept of Labour returns
  • Introduction to the staff (they will be apprehensive about their future)
  • Payment of the balance of the purchase price to the seller
  • Assistance in the business by the seller for the agreed period.

The above list may not be complete for all industries but it will give you a general idea. Once all is complete you can take over your business with the knowledge that you will be working for yourself and be able to enjoy the benefits….and responsibilities of course. There is no substitute for being your own boss and controlling your own time and earnings.

Good luck with your new venture. You have been bold enough to take this step and deserve the rewards

OUR SERVICES INCLUDE

  • Assessing a fair market value of your business
  • Assistance with information required
  • Trust and confidentiality in negotiations
  • Providing qualified buyers
  • Matching your business with qualified buyers in our database
  • Marketing plan for the sale of your business
  • Listing your business on our own and top international websites we subscribe to
  • Feedback on progress regarding serious buyers
  • Viewing arranged by appointment only
  • Information on what buyers really want
  • Preparation of sale agreements and facilitating the sale process

 

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