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Presale Planning: The Protection of Private Wealth in the Event of a Business Sale, Flotation or Liquidity Event


At the heart of Charles Russell Speechlys is a longstanding commitment to helping our clients generate, maximise and protect their private wealth. Our knowledge and expertise in this area has serviced the world’s leading creators and owners of wealth for over 150 years. Our top-ranked practice groups in the corporate and private wealth sectors illustrate the depth of our experience and technical expertise in this space.  

This article forms part of a series in which we consider how an entrepreneur or investor may achieve exactly that which we advise on: the generation, maximisation, and protection of their private wealth. Our focus in this piece is on the entrepreneur who is considering a liquidity event, perhaps the sale or flotation of their business, and what they may need to consider from a planning and succession perspective. In our experience, the generation of wealth most typically arises from the sale of a business owned and managed by an entrepreneur.

Prior to any sale or similar event, there are seemingly infinite considerations which a well-advised entrepreneur may entertain to ensure not only a smooth sale of their business, but also one which maximises and protects their gain. This article highlights and distils some key considerations an entrepreneur ought to explore when contemplating a sale or similar event.

Selling your business – key considerations

Our key considerations fall within three pre-sale brackets – “sale structure”, “preparation of the business” and “succession planning”.

There are some essential questions for the entrepreneur to take account of when considering a sale or similar event. For example: are they selling shares, or assets of their business? If shares, are they selling all their shares, or just a portion? Do they wish to, or are they likely to be required to, remain involved in the business post-sale, or is their wish to jet off to the beach?! These decisions must be made first and foremost.

Sale structure

Once the practical, “big picture”, elements have been decided, an entrepreneur should take advice as to how they might structure the sale to maximise the value generated from their contemplated capital event. The following are a few examples of relevant structuring considerations:

Business Asset Disposal Relief

Entrepreneurs will want to check their shareholdings are appropriately structured to maximise their return for their own benefit including to ensure Business Asset Disposal Relief can be claimed to achieve a reduced CGT rate of 10% on capital gains of up to £1m during their lifetime.

Inheritance Tax Relief

Some entrepreneurs take advantage of the Inheritance Tax (IHT) relief which is likely to be available on their shares by giving all or some of these to a trust prior to sale. A trust route is not for everyone, but it is important to consider this at an early stage, well before a binding contract for sale of the shares.

Others, who ultimately may wish to share their wealth amongst family members e.g. spouses / children, may look to make gifts outright pre-sale so that (if relevant) lower rates of capital gains tax (CGT) can be achieved whilst also implementing IHT planning.

Prepare for the unexpected

Whatever the sale structure, it is easy to get lost in the activity of sale or indeed business life generally and not get around to ensuring everything is in place in the event of something unforeseen happening, e.g. hospitalisation, loss of capacity or death. However, it is of vital importance that all entrepreneurs ensure they have appropriate Wills that provide for what happens to their shares and/or their (invested) proceeds in the event they die. In addition, they should put in place Lasting Powers of Attorney (LPAs) under which they can authorise others to manager their affairs on their behalf in the event of loss of capacity (or, with their consent, when they are simply physically unable e.g. overseas). LPAs can apply broadly to a persons assets or specifically to their shares and therefore can be bespoke to an entrepreneurs business interests.

Working out the structure in good time before any sale is agreed is essential both to ensure any tax reliefs are harnessed appropriately, but also that the drafting of the sale documentation reflects the plan.  As a firm our corporate and private client teams regularly work together on these structures, so those drafting the corporate paperwork are familiar with what must be included where there is a trust who is party to a sale or certain share transfers are not permitted.

Corporate Tax Considerations

There are also certain corporate tax positions which ought to also be considered as part of a pre-sale process. Whilst these have not been considered for the purposes of this article, they are equally as important, and expert advice should be sought in this regard for an entrepreneur to make the most informed decision as to the structuring of their contemplated sale.

Once a sale is contemplated, and structuring work has commenced, it is never too early to consider the condition of the business to be sold and to take steps to prepare the same.

Preparation of the business

It goes without saying, being on-top of business records not only reduces the time and expense one might incur by advisors navigating and poring over the same during any due diligence process, it also gives prospective purchasers a good impression of the business, and indicates that a business has been run efficiently, and compliantly. 

Tidying up any loose ends and packaging up a business can be arduous and time consuming; knowing where to start may appear daunting.  However, our Corporate team are adept at assisting with, and guiding you through, the legal elements of this exercise, and indeed encourage this process to start early to minimise any delay to a potential transaction. The below is an indicative list of the types of issues a well-advised entrepreneur would consider, when anticipating a sale:

Company Statutory Records

The statutory records of a business are the record of its ownership and constitution – they’re key for a purchaser to know exactly what they’re buying, and from whom. The questions are then: are they up-to-date? Do they show a clean audit trail as to the ownership of the business? Have any changes to the share capital been made, and are records of these changes available? Do the records at Companies House marry up with the statutory registers?

Business Value

A prospective purchaser may choose a target for any number of reasons. However, an entrepreneur should know where their business’ value sits – is it customer relationships? And if so, are these relationships recorded in written contracts and available for inspection? Are any key contracts coming up for renewal? 

Perhaps value instead rests in the intellectual property (IP) used by the business – if so, does the business own the IP, or is this licensed from third parties? If owned by the business, are the documents of ownership available for inspection (including any assignments from contractors)? 

We understand that a lot of businesses place a high value on their people, and indeed your people are likely to be an integral part of your business’ growth story. It is therefore important to have considered compliance with applicable employment laws (and pensions obligations) – non-compliance is a particular risk area we see time and time again, which is better solved prior to a transaction rather than as part of it.  In addition, if the entrepreneur wants to have a clean break from the business following the sale, it is often important to ensure the business has an established management team in place to help run the business post sale.

Company Accounting Records

A purchaser will no doubt be interested in the financials of the business – most purchasers seek profitable targets with growth prospects. As such, it is key to ensure that accounting records are available.  

Business Disputes

Purchasers will inevitably seek confirmation from an entrepreneur as to whether their business is subject to any disputes, or litigation. As such, an entrepreneur should be able to furnish any relevant documents concerning ongoing, or historic litigation, and also confirm whether it is aware of any current circumstances which may give rise to litigation in the future.


We noted above that there are seemingly infinite considerations one must make when contemplating a sale of their business. The above highlights just a few key elements for entrepreneurs to think about and get on-top of from the outset.  We are certainly well placed to help you prepare and plan appropriately, and steer you through any unforeseen obstacles that might arise.

Succession Planning

In addition to generating, and maximising value from their business, entrepreneurs should also consider how best to protect their gain for future generations. All of the above pre-sale considerations are essential but there are other tax and succession planning opportunities which can be taken post-sale which will be covered in our next article.  

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