Also known as a business angel or informal investor or angel funder. An individual who provides capital for an early stage or start-up business, usually in exchange for convertible debt or share ownership.
If you own a trading property within a company that you wish to sell, but you want to retain ownership of the property and perhaps rent it to the new business owner, it is possible to transfer the property to a separate company owned by you via a demerger, without paying tax at that point.
A payment structure whereby a proportion of the proceeds for the sale of your business is paid in future instalments.
An investigation of a business prior to signing a contract. It is the process through which a potential acquirer evaluates a target company or its assets for an acquisition. This type of investigation contributes significantly to informed decision making by enhancing the amount and quality of information available to decision makers.
Part of the purchase price is paid after the business is sold, based on the target company achieving certain financial goals.
A document signed by two parties intending to enter into a formal contract. They set out the basis of the deal in broad terms, before a negotiated sale and purchase agreement is signed. It is the same as signing a letter of intent.
When you sell your business, your main income stream usually ceases. Lifetime cash flow models your future costs, based on assumptions about the kind of life you want to lead in retirement, and compares that to your future income and the amount of capital expected to be received from the sale of your business.
Also known as a confidentiality agreement. It is a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to. It is a contract through which the parties agree not to disclose information covered by the agreement.
Consists of equity securities and debt in operating companies that are not publicly traded on a stock exchange. A private equity investment will generally be made by a private equity firm, a venture capital firm or an angel investor.
The agreement that finalises all terms and conditions in the buying or selling of a company as originally stipulated in the Heads of Terms. This document can either be for the buying or selling of shares, when it is known as a share purchase agreement, or the buying or selling of assets, when it is known as an asset purchase agreement.
If you own a group of companies structured as a holding company with subsidiaries, you may be able to claim Substantial Shareholding Exemption on the sale of a subsidiary. Subject to certain qualifying criteria, the gain made on the sale of the subsidiary will not be taxable in the parent company.
A bidder who is in the same industry as the target. Trade buyers are by far the most common type of takeover bidder, because they can hope to gain from synergies, economies of scale or monopoly pricing power.
Financial capital provided to early-stage, high growth potential companies. The venture capital fund earns money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as biotechnology and IT. Venture capital is a type of private equity.