First Business Sale

[EBITDA]

Hi all,

I am just in the process of selling my first business. It's a very small online store that I made a few months ago, so it's only being sold for a little bit of money (approx 14k).

Two questions:

1. The buyer does not have enough cash, so we have agreed for him to pay half up front, and the other half in 4 quarterly installments. What is the best way, legally, to ensure he meets these payment obligations?

2. The business is tiny, how much should we expect to pay in legal fee's to make this all official? I worry that the legal fee's might be relative huge compared to the value of the business.

Many thanks

 

[cjd]

Assuming that this is only software and not part of a limited company, I'd just write a simple letter with terms of payment, get him to sign and agree it with payment of the 50% up front. Then send an invoice for the remainder.

Keep control of the domain and software copyright until final payment.

 

[EBITDA]

Assuming that this is only software and not part of a limited company, I'd just write a simple letter with terms of payment, get him to sign and agree it with payment of the 50% up front. Then send an invoice for the remainder.

Keep control of the domain and software copyright until final payment.

Thanks for your reply cjd. The thing is, it is actually a ltd company. It's only cloud based eCommerce store so there is no software to withhold, only logins.

Any other advice would be welcome, especially if somebody has taken part in a similar transaction or sold a very small business like this....

 

[cjd]

Then really you need to get advice - it needn't be expensive and if you're going to carry on in business, the sooner you find a good business lawyer that you can trust the better because you'll need one at various points in your life.

http://uk.businessesforsale.com/uk/sell-my-business-legal-pitfalls.aspx

(If you have an accountant, they can help too - and the same applies to them, find one early, they actually save you money, not cost.)

 

[Faevilangel]

1) Keep control of everything - give them a username and password for everything but ensure you keep the full admin rights and they get restricted access.

2) Keep the domain in your name, and don't give them the logins until the final invoice is paid, the same for the hosting account (if applicable)

3) Do a credit check on them, will cost a few quid but will ensure you know what you're getting into.

You need to be thorough on checking their credentials and keeping all the details safe, until they have paid.

 

[EBITDA]

1) Keep control of everything - give them a username and password for everything but ensure you keep the full admin rights and they get restricted access.

2) Keep the domain in your name, and don't give them the logins until the final invoice is paid, the same for the hosting account (if applicable)

3) Do a credit check on them, will cost a few quid but will ensure you know what you're getting into.

You need to be thorough on checking their credentials and keeping all the details safe, until they have paid.

hmm OK then. Looks like I will be needing some real legal advice.

Thanks for the help everybody....