Buying And Selling An Optical Business: What You Need To Know
If you’re looking to invest in an optical business, or ready to hand over the keys and sell, buying or selling a business can be a complex process. Solicitors play a crucial role in this process, and in this article, we take you through the key steps you need to know.
What To Consider When Buying An Optical Business
Finance
You’ll need to clarify from the outset what security any funder will be requiring to ensure there are no delays moving forward.
Property Aspect
You’ll need clarification as to whether you are taking over the existing Lease or having a new Lease negotiated directly with the Landlord. Agreeing the terms as to how the business premises is going to be dealt with at the outset will save a lot of time as the transaction unfolds.
Share Sale or Asset Sale
You’ll also need to clarify with the seller or agent from the outset as to whether the transaction is to be a purchase of the shares of a limited company or whether it is going to be a purchase of the certain assets.
NHS Contract
It is imperative that certain provisions are included in the Sale Contract obligating the seller to keep the existing NHS Contract in place for a certain period of time after completion. This will then allow you sufficient time to obtain your own NHS Contract and to continue with NHS work during the transitional period.
It cannot be understated enough how important the legal advice from the solicitor acting for the person selling the optician business will be in this area.
How A Solicitor Can Support The Sale Of An Optical Business
Pre-Sale Preparation
Pre-sale agreements may be required. For example, a confidentiality agreement or some form of non-refundable deposit agreement may be necessary.
Due Diligence
A solicitor will assist with the answers required to the due diligence questions that the buyers lawyer will raise.
Negotiating Terms
A solicitor will advise on and negotiate the terms of the actual sale agreement
This will ensure that the seller gets the cash (or other sale consideration) agreed, especially if some of the cash is payable based on future performance of the business or deferred payment terms.
Warranties
A solicitor will be able to manage the post-sale liability of the seller of the optician business against any warranties, representations or indemnities in the sale agreement. A warranty is a statement of fact about the business, which if inaccurate will technically give the buyer of an optician business a means of legal redress. Often the warranties will form the bulk of the sale agreement. Sometimes the solicitor acting for the buyer of the sale agreement will attempt to include warranties which are completely disproportionate for the size of the transaction and issues, thereby creating considerable risk following the sale. It cannot be understated enough how important the legal advice from the solicitor acting for the person selling the optician business will be in this area.
A good law firm will also be able to manage any other responsibilities for the seller of the optician business. For example, non-compete restrictions, and any post sale consultancy assistance.
There are certain nuances to the optical industry and it is important that you have legal representation which is experienced with dealing with the differences to typical business transactions.
The solicitors dealing with your transaction are also business owners and so have empathy with the challenges and benefits that come with owning a business.
If you require any assistance, please do not hesitate to contact our team.
This information reflects our current understanding which could be subject to change. This does not constitute legal advice.
