Seller Checklist

Seller  Checklist

 
The  following  are  some  Elements  of  a  Business  Deal  that  we  have
identified  that  needs  attention  from  a  Prospective  Seller  : 

( Your  Next  Level  -  BUSINESS  BROKER  is  fully  qualified  and  able
to  assist  you  with  all  the  important  matters  as  stated  below ). 

1.     Provide  Information
Prepare all figures on the Business to satisfy the Buyer during his Due Diligence Process. Many deals collapse at this stage because of insufficient information or because of the Seller not being able to prove his Profit Amount.
 The Purchaser should furnish the Broker with a letter confirming his satisfaction with the Due Diligence Process.
 
2.    Comply  with  Agreement
Comply with any other Suspensive Conditions of the ‘ Memorandum of Agreement ‘ or if these conditions are waived, it should be reduced to writing. Until the Suspensive Conditions have been met, your Contract is null and void.
 
3.     Stock  Take
Organize all Purchase Invoices for Stock prior to Stock Taking.
 This is needed to have the Cost Prices of each Stock Item available for Stock Taking.
 
Ask your Broker for advice on how to organize a proper Stock Take.
 
4.     Lease  Agreement
Arrange with the Purchaser to meet the Landlord for transfer of the Lease on Premises.
 Remember that you can also arrange for a Session of your current Lease Agreement and some Landlords may also accept a Sub-Lease Agreement. 
It is most important to have a copy of your Lease Agreement available. 
Be patient in recouping your Deposit as some Landlords do take their time.
 
5.     Asset  List
List all Assets of the Business with a clear description of each.  Make sure that all Assets are in working order especially Electronic Equipment such as Fridges.  
It is important that vehicles are in a good condition to enable the Purchaser to obtain a Roadworthy Certificate.  
In terms of the Consumer Protection Act , defects and problems with Equipment should be pointed out to the Buyer beforehand.
 
6.   Hire  Purchase / Lease  Agreements
Arrange for the settlement of Hire Purchase (HP) and Lease Agreements on Assets that have been financed.  If your agreement stipulate that the Purchaser will take over these Leases and HP’s, you would need to assist him in obtaining a new Lease or HP and settle the   current outstanding balance.Make sure that you are released from any Suretyship from the Bank / Financing House.

 
7.     Terms  of  Agreement
If your Agreement also stipulates that the Purchaser will be paying the purchase price on terms, make sure that you have arranged with the Purchaser for the specific method, date and Bank details of payment. Remember that your Broker will not be involved with  these arrangements, unless otherwise specifically agreed upon.

 
8.     Staff
You will know best when to inform your Staff of the Sale of the Business.  It is a good idea to do this in conjunction with the Buyer.  It is important that Staff Members recognize their rights in terms of the Labor Relations Act and do not feel threatened by the Sale of the Business. The new Owner will carry all the responsibility and liability towards the Staff as if there has been no interruption.

 
9.    Insurance
Cancel Insurance as of effective date or arrange for Buyer to take over.  If your deal is structured with payment over a term, make sure   that the Purchaser keeps the Insurance in tact.

 
10.   Utilities
Arrange cancellation of Electricity for Effective Date. 
Do this in conjunction with Purchaser so that he / she is reconnected.
 
11.   Telephone  Lines
Transfer of Telephone Line/ numbers to the Purchaser.
  You would both need to complete the necessary Telkom Paperwork.
 
12.   Finalize  SARS  Returns
Depending on the structure of your deal, it is important to finalise your Financial Statements.  It is best that your Accountant attend to this for Tax Implications are different depending on your decision to either de-register the CC / Pty Ltd, declare a Dividend or keep on trading in the same CC / Pty Ltd.If your deal was for the Sale of your Shares / Membership, you would also need to provide the Buyer with a set of Effective Date Financial Statements.
 
13.   Assistance  to  Buyer
Provide any assistance to the Buyer to finalise the Transaction. The assistance of the Seller is especially needed during the Buyer's Application for Finance.
 
14.   Buyers  VAT  Registration
Do remember that if your Transaction is structured as a Going Concern, it is important that the Buyer is also registered as a VAT Vendor from Effective Date. If not, SARS will levy 14% VAT on the Transaction which you will have to pay. Make sure your Professional Broker assists you with completing a well-drawn up, legal and valid Sales Agreement and continually follows up the process with the Buyer.
 
15.   Your  Bank  Details
Most Buyers will pay their Initial Deposit into the Trust Account of the Agent/ Broker.  Make sure that you forward instructions to the Agent/ Broker into which Bank Account you want the money to be paid.

 
16.   Ask  your  Agent / Broker
Each Business is unique and every other deal is different.  Your Professional Business Broker will be able to point out certain criteria that you need to attend to and his/ her experience and advice will be of great value to ensure a smooth and trouble free Transaction.

( Your  Next Level  -  BUSINESS BROKER  is  fully  qualified  and  able
to  assist  you  with  all  the  important  matters  as  stated  above ).
 

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