4 considerations when selling a business in Ireland
There are several good reasons to sell your business or limited company in Ireland, including retirement, making money, or simply wanting to exit the business. You can sell your assets to a third-party buyer or to another business, or alternatively if you own a limited company you might consider transferring your shares.
If there is more than one shareholder in your company, you will have to work with your fellow shareholders in order to get the business sold. Sometimes, not all of the shareholders agree, so it is important that you have a good shareholders agreement that covers every eventuality.
If you are considering selling your business, make sure you check the company’s Constitution and any shareholders’ agreement in advance, as they frequently include provisions for buying and selling shares. It is also worth getting professional advice from a solicitor or accountant who specializes in company law. With careful planning and preparation, selling your business can be a smooth and profitable process.
The following considerations are taken from Adamslaw.ie
In Ireland, businesses are often sold through a share sale. This means that all of the shareholders need to approve the sale. Additionally, the assets and liabilities of the company are transferred to the buyer. So, it’s important to have all your ducks in a row before putting your business on the market. A little preparation now will save you a lot of headaches later on.
The shareholders’ pre-emption rights are set out in the company’s shareholders agreement and/or Constitution, so it is important to double-check that you are not in violation of these rules when you try to sell a business in Ireland. Pre-emption rights allow existing shareholders to buy shares before they become available to a third party buyer, either as part of a new share offering by the company or through a stock transfer by an existing shareholder. This means that if you want to sell your shares, the existing shareholders have first dibs on buying them. There are a few exceptions to this rule, such as if the company is being wound up or if the sale is part of a larger reorganisation, but generally speaking, the pre-emption rights of shareholders should be respected. Violating these rights could lead to legal action being taken against you, so it’s not worth risking it. If you’re not sure whether or not your planned sale would infringe on the pre-emption rights of shareholders, seek professional advice before proceeding.
Capital gains tax
When you sell your business in Ireland, you may make a capital gain. This is the uplift or profit you get from the sale. Capital gains tax is a charge on the profits earned when you sell (or ‘dispose of’) an asset that has appreciated in value. It is not the consideration you receive that is taxed; it’s the uplift in value. If you end up with a Capital Gains Tax liability, you may be able to claim other tax relief benefits such as Entrepreneurs’ Relief or Retirement Relief. The best way to avoid paying capital gains tax is to ensure that your business is valued correctly from the outset. A professional valuer can help you do this. They will take into account factors such as the current market value of similar businesses, your company’s history and financial performance, and any unique features of your business. By getting a accurate valuation, you can minimise your capital gains tax liability and maximise your chances of a successful sale.
Selling your assets
Many people are surprised to learn that they can sell the assets of a limited company, rather than just its shares. This can be an attractive option for business owners who want to retain control of their company. By selling the assets, the new owner will be able to continue operating the business as usual, without having to make any major changes. In addition, this option can provide a higher level of financial security for the seller, as the purchase price is typically paid in full up front.
However, it is important to consult with a professional in order to get an accurate valuation of the business and its assets. With careful planning and execution, selling the assets of a company can be a great way to ensure its continued success.