How to sell your half of a business

When people buy a business with each other, it can be difficult to know what the trajectory is going to be. Circumstances can change and this may mean that your desire to keep your share of the business may change. If you find that you now fall into the category of someone who now wants to sell their part of the business, then read this article in which we explain what exactly you should do at this stage.

Why would you want to sell your part of the business?

There are many reasons for why you may want to make this decision, such as to reduce responsibilities, control expansion, or to unload non-performing assets. Other reasons include wanting to release cash, or to upgrade leadership.

First steps

There are some key first steps you should take when selling a partnership which are essential that you follow. Firstly, you should check your business’ partnership agreement because it could have restrictions and conditions on the sale. Most buying partners want to ensure that the transaction is smooth and make sure that the selling partner has a smooth get out.

The document that sets out the guidelines for a partnership sale is called the “Buy-Sell Agreement”. These types of agreements are drafted frequently by law firms all over the country. The purpose of this agreement is to define the procedure for the transfer of ownership, terms, price, and transition before of any transfer. It is a vital document as it prevents a partner from holding another partner at a certain price.

Staff

If anybody is working for you, it is essential that you inform them of the sale. You should sell then when you are selling the partnership, so that they know in advance, and it is not just sprung upon them. You should also let them know the reasons for why you are selling the partnership. It is also key that you give them details about the redundancy terms or relocations packages you will offer if this is applicable to your circumstances.

Tax returns

You have to fill out a personal Self-Assessment tax return by the deadline. As you are in a partnership, you cannot fill this out online, so you should use commercial software or download other forms instead.

Capital Gains Tax

It is possible that you made a ‘capital gain’ when selling the partnership. This could be the money you get from the sale, or any assets from the partnership that you can keep.

If the result is that you have to pay Capital Gains Tax, it may be possible for you to reduce the amount by claiming Entrepreneurs’ Relief, or from other reliefs.

How to sell

At FastCash4Houses, we can help with this part of the process by giving you a valuation. All you have to do is tell us about the property, we will process the property valuation, and then give you a no obligation cash offer within 24 hours. It could not be easier. Get in touch with us today if you are looking for further advice on selling your half of a business.

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