Issue link: https://digital.canadianlawyermag.com/i/226536
to offer to buy the assets, or the portions of your company they want. If the buyer wants to take it all they're buying the shares. "If I buy the shares of your company, it means I'm taking over your entire company," says Ungerman. "There are advantages and disadvantages to both." Then be prepared for the offers and know the options. The first one may look good on paper, but it may not be a good match. If you're looking to retire, not all the offers will work for you. For instance, an offer with only a portion of the money up front and the rest paid out over time as an earned partner has risks and will not get you directly into retirement. After examining the terms of the agreement, you may decide the deal doesn't look nearly as good on paper. When a serious buyer comes along and wants to kick at the tires, enter into a confidentiality agreement. That way any prospective buyer — who may well be your competition — can't use the information gleaned by examining your business to advance his or her own business. Asking for proof of financing will also help weed out those who aren't serious, adds Doug H. Scott, a mergers and acquisitions lawyer with Fasken Martineau DuMoulin LLP. "Think like a buyer," says Scott. "If you have a business plan, get it out, dust it off, and update it. You've got to create an atmosphere of organization, professionalism, and competence." The hidden value so often downplayed in family businesses should be put on display, but don't put everything out there for the competitors to see. Scott warns against signing anything early on, even with promises that any agreement is non-binding. What you thought was a date, could end up being a marriage. There are professional buyers who want to move through the process quickly. That's where the preparation comes in handy; all the information they're looking for can be at your fingertips if you're prepared. Scott anticipates more businesses will be hanging out a "for sale" sign in the coming years. There are a little more than one million small businesses in Canada, and Industry Canada found nearly half are owned by those aged 50 to 64, meaning a good portion of those businesses will change hands over the coming years as owners prepare to retire. An increasingly popular sale process is the auction. The advantage there is they attract all sorts of prospective buyers, although it is more expensive and the process can be longer. What's often important to families selling their business is that its legacy or vision be perpetuated. Sometimes the right fit can trump the highest bidder. "For family situations it's not always just about the price," says Scott. "Family-run businesses are different and you've got to acknowledge that when you start the sale process." 19