Selling or taking over a business: instructions for use

Accounting expertise | Asset Management

Selling your business can be a way of increasing the value of your assets, passing them on to your children, or preparing for the company’s future.

Taking over a business offers a number of advantages over setting up a new company, enabling you to develop your business quickly and on a solid footing.

Transferring a company is an important stage in its life. To increase your chances of success, you need to follow a few simple but essential steps.

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Choosing the disposal method

There are many ways to pass on your business:

  • Transfer of shares.
  • Transfer of the business.
  • Partial disposal of assets.
  • Lease management.

In addition, this transfer can be made either free of charge (as part of an inheritance, for example) or against payment (in the event of a sale). Deciding on the most appropriate way to sell your business can save a considerable amount of time, and avoid mistakes with serious consequences for both seller and buyer.

Prepare an information memo

Just as a company founder needs to create a business plan, a manager wishing to sell his company needs to create a file called an “Information Memorandum”. It includes :

  • Business presentation
  • Disposal method
  • Diagnostics
  • Company valuation
  • Customer information

This document, which is only provided to potential buyers once a confidentiality clause has been signed, saves precious time and enables a rigorous selection process.

Carry out a company audit

Before thinking about handing over a company, it’s essential to carry out a general audit of the business to identify its strengths, areas for improvement and any operating problems. In this way, any outstanding issues can be resolved before the sale takes place, to ensure a smooth transfer of ownership.

A simple general inventory is sufficient for most small companies. Nevertheless, a company manager may decide to delve deeper into certain subjects that stand out.

For medium-sized to large companies, we generally prefer thematic diagnostics, which can be further detailed as required.

Here are a few examples of company audits:

  • An audit, usually carried out by a chartered accountant.
  • Commercial audit, which consists of analyzing the company’s positioning and development prospects.
  • Human audit, a complete assessment of human resources and organizational structure
  • Regulatory audit, to ensure that the company complies with current and future regulations

Assessing the company’s value

In this respect, it’s important not to confuse the value of the business, which is the result of an estimate based on a calculation method, and the sale price, which is the result of a negotiation between seller and buyer.

Valuation of the business provides a price range as a “basis for discussion”, but the selling price also depends largely on supply and demand, as well as the objectives of each party (long-term survival of the business or rapid financial gain).

There is no “correct method” for assessing the “true price”. In most cases, appraisers apply several different calculation methods to obtain an average and give a value range, which can sometimes be very wide.

👆 Let our teams help you assess the value of your company.

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Negotiating a memorandum of understanding

Whether it’s a free transfer or a sale, it’s important to sign a memorandum of understanding covering all the points discussed between the seller and the buyer.

This memorandum of understanding is a definitive commitment, which precedes the actual sale by just a few weeks. It is therefore an extremely important legal document, and it is advisable to seek the assistance of specialized professionals (lawyer, notary or chartered accountant) when drawing it up.

Once all financing has been obtained and formalities completed, the final deed of sale is signed.

Organizing the transmission

To facilitate the transfer of a business, a support contract is often included in the memorandum of understanding. This enables the seller and buyer to manage a number of key points, such as :

  • Meeting with key suppliers and customers.
  • Team presentations.
  • Training in the tools used.
  • Advice and sharing of company know-how.

This transition period is essential to ensure continuity and guarantee the company’s long-term future. This support period may be paid or unpaid, and must have a clearly defined timetable.


What types of company are involved in business transfers?

Any company can potentially be concerned by a transfer, from a small business to a large multinational group. Whatever your legal status, from EI to SA, EURL, SARL, SAS… a business can be sold and taken over.

Where to buy/sell a business?

There are a number of websites designed to put potential sellers and buyers in touch with each other. One of the best known, set up by the French Chamber of Commerce and Industry, is Transentreprises.

What are the tax implications of selling a business?

Generally speaking, tax is calculated on the capital gain realized. However, there are a number of aids, exemptions and other special cases. It is therefore advisable to call in a specialist to study each situation beforehand.

📞If you’d like to discuss your business creation or transfer project , our teams are available to support you.

👆 Would you like to find out more about our asset management services or our digital accounting services for small businesses and start-ups?


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