Boarding kennel and cattery owners tend to be involved in their businesses in a very hands on way. So, when the time comes to sell, the process can all be quite stressful.
Not only are you letting go of a business in which you’ve invested so much time and energy but, on top of that, you’re faced with the emotional wrench of leaving your family home and loyal clients (and their pets), many of whom have become more like friends.
Finding a buyer who recognises the value of the business you have built (and what it has to offer) is just the first step in the process…
Legal process for selling a Kennels or Cattery
Once you’ve found your buyer, you’ll need to agree a deal price and structure. This may involve some initial information sharing where a confidentiality agreement (also known as a non-disclosure agreement) is helpful. You will also usually be expected to sign a Heads of Terms or Memorandum of Sale too.
Although often expressed to be not legally binding, in practice, these documents are important for setting out yours and your buyer’s key expectations in relation to the deal. As such, you can gain significant value from a solicitor who specialises in selling businesses to structure these documents or to review the one provided by the agent. Make sure you appoint, or at least talk to, a solicitor before you sign even a non-binding Heads of Terms or Memo of Sale.
Due diligence – this is the investigatory stage of the process where the buyer seeks to establish what it is he or she is buying. Astute sellers work closely with their legal advisers at this stage to package the property and business data and documentation – warts and all – in the best possible light and, if appropriate, to release more sensitive information only at later stages.
Full disclosure should be the aim but an experienced solicitor will manage this process efficiently and to your advantage. At Truelegal we make full use of virtual datarooms for due diligence which greatly enhances speed, transparency, efficiency and traceability. It allows you to share information confidentially with the buyer without the hassle of time consuming and disruptive photocopying or cabinet trawling.
The Business Sale or Purchase Agreement is the key document, together with the related Disclosures. Often the agreement will run to 20 pages or so with much of the document dedicated to warranties and indemnities which you, as seller, will be asked to give and which will impact on your exposure to future liabilities after the business is sold.
There will also be legal documentation required to transfer the freehold of your property, or to assign the lease, and to transfer your Animal Boarding Establishment Licence.
Alongside the main agreements there will be other issues where advice is required. A prime example is dealing with any employed and temporary staff. Where you are selling the business goodwill (rather than shares) you will need to become very familiar with TUPE legislation, which has a number of pitfalls for ill-advised sellers.
Occasionally the process runs really smoothly but, more often than not, the due diligence phase will throw up one or two issues that have to be resolved with the buyer. This is when it really pays to seek legal advice from a solicitor who really understands the business selling process and can give you sound commercial advice.
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The sooner we become involved in the process of helping you to sell your kennels or cattery the more likely it is that your sale will be successful, so please contact us today.
Our full contact details can be found on our Contact Us page.
We look forward to hearing from you.