Port Mann SurreyBusiness Lawyers

Legal services for Business, Government, Institutions

Selling your Business

If you are considering selling your business or bringing on third party investors, advance planning can add value to your business in a number of ways:

Employment agreements

A purchaser will review your company’s employment agreements. Your company will likely be worth more if the agreements are well drafted. Some of the key clauses should include notice provisions, confidentiality of trade secrets, non-competition and non-solicitation.

Ownership agreements

Without an ownership (or shareholders) agreement, a majority shareholder may not be able to force a sale of the company. It is generally in a majority shareholder’s interest to have a shareholders agreement with drag along rights, which would enable the majority shareholder to force the other shareholders to sell their shares at the same time and on the same terms.

Commercial lease

You should consider whether the remainder of the term of your lease and its renewal period is long enough for a purchaser to operate in the premises and obtain a return on its investment. If not, you may want to negotiate an extension of the term before selling the business.

Intellectual property

A company’s name is generally a valuable asset and can be protected by a trademark filing as well as at the corporate registrar through a DBA filing or a corporate name. Without name protection, the goodwill of the business may be diminished. Your company may also hold valuable copyrights, in which case you will want to ensure that your employees have waived any moral rights they may have.

Corporate records

Your corporate minute book should clearly show the history of the company including changes in shareholdings from incorporation to current ownership. A purchaser will not be impressed with a shoebox full of corporate records that fails to meet the requirements of the BC Business Corporations Act.

Negotiating the deal

You will want to be careful not to disclose too much information too early, especially to a competitor. Our lawyers can assist you in determining how to phase the disclosure of information. We can also negotiate and draft letters of intent and confidentiality and non-disclosure agreements on your behalf.

At McQuarrie Hunter, we regularly review and draft documents and agreements such as these to maximize the value of a company to a prospective purchaser.

If you have a family business question or you need help with a family business planning or succession matter please contact Tako van Popta to schedule an appointment.

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