The sale of a business is a complex process involving a number of legal and regulatory issues. In this article, we’d like to give you a few examples, without being exhaustive – each situation is unique.
What’s the current status of your contracts?
An in-depth review of all current contracts, agreements with employees, customers, suppliers and business partners is necessary to ensure that all contractual obligations are met or resolved prior to the sale.
For example: if your company has a contract with a supplier for the supply of raw materials and this contract ends in six months, it is advisable to ensure that all contractual obligations are fulfilled until the end of the contract, or consider renegotiating the terms with the supplier before the sale.
What can a potential buyer ask for?
Potential buyers will conduct a thorough due diligence to assess assets, liabilities, contracts, financial situation, potential disputes, intellectual property, tax issues, etc. You’ll need to provide complete and accurate information during this process.
For example: the potential buyer may ask to see your company’s financial statements for the last five years, as well as all current contracts, details of current or past litigation, and information on key employees. You’ll need to provide this information fully and accurately.
In what form will you sell?
You’ll need to decide on the structure of the transaction, whether it’s an asset sale or a share sale. Each of these structures has different tax and legal implications.
For example: You may decide to sell the tangible assets of your zenterprise, such as equipment and real estate, while retaining the company as a separate entity, or you may sell the shares of the company itself.
Is your business subject to additional regulations?
Some business sales may require specific regulatory approvals, depending on the company’s sector of activity. Financial or healthcare sectors.
Rest assured that the buyer of your financial company meets the conditions imposed by FINMA on the basis of LSFin.
What about your employees?
Current employment contracts with employees will have to be managed in accordance with Swiss labor legislation. Employees’ rights will need to be respected, and you may need to negotiate severance packages.
It is generally possible to contractually negotiate with a buyer to retain your employees after the sale of your company. However, this will depend on the willingness of the buyer and the terms of the transaction.
Does your company own any intellectual property?
If your company holds intellectual property rights, such as patents, trademarks or copyrights, you will need to deal with the transfer of these assets appropriately.
Either you sell these rights through a licensing agreement, or you sell the shares if you have expressly created a trading company that owns the intellectual property rights.
Working closely with corporate lawyers, accountants and tax advisors who specialize in business transactions is essential to successfully navigating the sale process. Careful planning and a thorough understanding of the legal issues are essential to ensure a smooth sale that complies with Swiss law.