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We agreed the price and other terms with our potential buyer on the 4th of April. That’s when the hard work really began as our solicitors were instructed and the pace of information requests significantly quickened.
We were selling a limited company and this meant that the transaction would be dealt with by a Share Purchase Agreement to be drawn up by the buyer’s solicitor. We were offering a new lease for the premises and our solicitor would draw up this agreement. The next three months were very much filled with bringing these two parts of the deal together.
For us there was the regular request for information from the buyer and his solicitor. This stretched from staff details to flooding risks (the shop is on top of a hill so that risk is pretty close to zero). During these three months we past over dozens of documents through our solicitor. Thank goodness for having a good scanner!
One of the great benefits that our buyer and I had in bringing the deal to a positive conclusion was that we quickly developed a good relationship and were able to talk to each other about any questions that came up. I of course regularly talked to our agent and solicitor to either get their guidance or to bring them up to date.
As we were to become landlords we needed to get the electricity and gas safety checks done. The electricity check showed that we needed to have some improvements made to bring the installation up to date. This done our safety certificate was issued. The buyer’s surveyor discovered that there was evidence of woodworm in the roof and elsewhere. We called in a specialist firm to deal with this. After they had undertaken the work they provided us with a guarantee certificate for this. All these we passed on to our solicitor and he sent them on to his counterpart.
As the deal was by way of a share sale our solicitor advised us that we would need to provide a declaration letter for the buyer. We needed to let our solicitor know about all the issues that may come back to ‘haunt’ the company later like our dismissal of a weekend employee http://www.betterretailing.com/2011/06/staff/a-thief-in-our-shop-police/ and a past dispute with a supplier who threatens court action. We also needed to put in the letter that we offered a ‘box office’ facility for many of our community groups. This list took several weeks to compose as many items that we eventually included were not immediately apparent.
We had to provide a register of assets, fixture & fittings, equipment, etc. In fact everything that our company owned and used on loan like the cigarette gantry and Post Office equipment. The list went through several drafts as we thought of more and more items that needed adding to it.
The next list was of our suppliers, everyone from Smiths News and Capper & Co our biggest suppliers to our smallest ones like a cash and carry that we rarely used. We included as much detail as was easily available account numbers and contact information.
We of course also had to agree a completion date that Post Office Ltd could accept, they needed to provide an Auditor/Trainer to oversee the transfer and deal with any training/compliance issues.
In the final part we look at the completion and transferring of the business.
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