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Good day.

My name is Nicolene Schoeman-Louw. I’m an attorney conveyancer, notary public and mediator. I practice as such at SchoemanLaw Incorporated. Based in Cape Town, South Africa, we proudly serve the legal needs of the entrepreneur. I’ve been serving various entrepreneurs, regardless of the season they find themselves in, in their business, the size of their business or industry. And the one thing that has come up many, many times. Particularly for entrepreneurs who’ve been in the business for a longer period of time, is the question of exit or sale. When is a good time to start the process of exit or when is a good time to sell my business? And once that happens, what does that actually look like? In terms of answering the question when it is a good time to exit or when it is a good time to consider a sale? Well, that is really a very personal question that each entrepreneur only answer for themselves.

For some I’ve seen that it’s time-bound. And for others, I’ve seen that it’s revenue target bound. So whatever your measurable, you’ll know when the time is right to seriously start considering this. But if you know as you’re sitting there right now, but Sale or exit is inevitable, for you to transition into whatever comes next for you as a person. It is a good thing to start considering your options. Right now and to start planning accordingly. Unknown Speaker 1:50 In terms of a sale. If you receive an appealing offer, that would usually be a good sign that this is the right time to consider a sale. It needs to be intriguing. And in order for you to really ensure that you’re identifying and treating offers correctly, you need to know your business worth. So if we now move on in considering Once we’ve received an appealing offer, once we have hit that trigger to start our exiting process, it is important for us to know and consider the various options available in terms of structuring our exit or sell.

Now there are roughly 3 types of sale agreements that could be constructed. It could be a share sale agreement when you sell the shares of your business.

It could be an entity sale, where you sell the business as a going concern, for example, or it could be an acid sale, where you strategically identify and sell certain components of your brand, its likeness, or even movable and immovable assets. How ever you choose to structure it.

It is important to ensure that you know the pros and cons as it pertains to you in relation to each of these options. So it’s important to look at the tax consequences for each type of transaction and to clearly understand what your buyer is expecting from you post yourself transaction being concluded. What do you need to handover? What do you need to continue working there. Is it a full sale or will you remain a part owner and if so for how long? And what does that actually look like?

So it’s really important not only to seek professional legal advice, but also tax and financial advice in making a sound decision. And once done to ensure the agreements you enter into are reflective of all the negotiations and discussions you have had with the potential purchaser.

Thank you so much for joining me today. I really hope that this video was useful.

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