Would you like to be able to sell your business to a trusted buyer, for a price agreed in advance and at a pre-agreed time that suits you?

Wouldn’t it be wonderful to remove all of the uncertainty that comes with trying to sell your business?

For the enlightened business owner there is a remarkable and very powerful way for you to take control of your future.  It is an art that has been practised for many years but is often not properly understood.

Following this route allows you as owner to take cash out of your business paying tax at only 10% whilst potentially retaining an equity stake (if you wish) going forwards.

Used in the right way, planning for a Vendor-Funded Management Buy-Out (or V-F MBO), can be an extraordinary way for you to get your employees to think like business owners.  It also empowers you, the business owner, to think like an investor, creating a powerful way for you to grow your business.

Much more than a business development tool it can change your mindset and that of your team.

Here is how it works at the point of your sale.

1) Your management team form a new company (Newco).

2) Newco then acquires all of the shares in your company and pays for those shares out of the future cash flow of the business over a period of times.

3) Any surplus cash in the business can also be paid out at this time (with you paying only 10% tax).

4) You may also wish to use some of that value to retain a minority shareholding (which could compensate you for the risk that the sale does not go to plan over the agreed payment period). This also gives you a nice upside reward if things go very well which, with you as an interested investor providing guidance and support to your team, has every chance of being the case.

This could also be a great stepping stone for a future trade sale. By bringing the team together to think and act like business owners, the business will likely be in a much stronger position for growth moving forwards.

By paying you out of the future cash flow of the business, your team does not have to risk any of their money or put their personal assets or security on the line. This really can be a win win situation for you and your team.

For further information, please do not hesitate to contact an Everyman Legal Solicitor on 01993 893620 or email everyman@everymanlegal.com