Selling your Business – What about your Lease?
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Selling your Business: What about your Lease?
So you are thinking about selling your Business. There are quite a number of things you need to consider before you list it for sale. One of those things is the location from where you run your treasured business.
Most businesses are run from leased premises. This means that you have a landlord and that landlord will need to agree with you selling your business. Yes, I do realise it is your business, and you may sell to whomever you like (in theory….) but the person who buys your business will be your landlord’s new tenant. This means your landlord needs to consent to the buyer as the new tenant. Do you have a good relationship with your landlord? Perhaps this may be a time to mend some bridges?
Also, think about the lease itself. What shape is it in? Consider things like what is the term of your lease and should it be longer? Will a buyer of the business need a little longer term to feel comfortable and secure enough to pay you good money for your business? Think about the options for any further terms. Are you in the second or third term allowable under your lease? If so, have you exercised your options on time? These issues will be critical to a buyer and you really don’t want to be surprised by them during the stage of the purchase where the buyer is investigating the viability of your business. We lawyers call this stage the “due diligence”, but for an unprepared seller it may as well be called “going through your affairs with a fine tooth comb”. Unfortunately it is this stage where a lot of business sales fall over. These casualties can be avoided a lot of the time.
All of this does not have to be as complicated as it sounds if you have some decent advice at the start of the process and you take a little time to prepare. Preparation. We’ve all heard of it. We all agree (in theory….) it is a good idea to be prepared. What’s important for a stress free sale of your business is to put that idea of “being prepared” into practice.
If you need any advice on how to be prepared and avoid any dreaded surprises during a due diligence period, please feel free to contact us for a chat.
The information in this document represents general information and should not be relied on for your specific circumstances. If you require legal advice and assistance on the matters contained or associated in this document you should contact MMLaw.
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The content published in this Blog is in the form of academic papers and the opinions expressed herein are generalised. The information provided is for educational purposes, not specific legal advice.
The application of any principles referred to can alter from case to case and accordingly you should seek independent legal advice in respect of your individual circumstances.