Thinking about selling your business? Here’s the truth: legal red flags kill more deals than just about anything else. The good news? You can avoid almost all of them if you prep early and get your house in order
The Dirty Laundry Buyers Always Check
You might think the real value in your business is the product, the client list or the revenue, but buyers are obsessed with risk. The fewer surprises, the more they’re willing to pay.
7 red flags we see
Ownership headaches
Are your shares, unit certificates, asset registers and all the boring bits up to date? If you can’t prove you own what you’re selling, the deal will fall over—fast.
Messy structures
Many SMEs have bits and pieces running through family trusts or entities that have nothing to do with the core business. If a buyer finds this, they’ll walk away or demand a hefty discount to deal with your mess
Dispute disasters
Shareholder disagreements and unresolved family squabbles can nuke a deal. Sort them out before you go to market.
Contract chaos
Are your key customer and supplier contracts formalised? If they’re verbal or out of date—or can’t be assigned to a buyer—you’re in trouble.
Employment struggles
Got “contractors” who are really employees? It’s illegal, risky, and buyers will run for the hills. Make sure employment and contracting agreements are all above board.
IP nightmares
If you’re a brand- or tech-driven business, make sure you own your intellectual property. If it was created by a contractor but never formally assigned to you, that valuable asset could be out the window.
Old skeletons
Court cases, unpaid taxes or fiddly compliance issues will be sniffed out in due diligence, no matter how well you think you’ve hidden them.
When Should You Bring in Advisors?
Yesterday. If that’s not possible, today. Early involvement gives you time to tidy things up, restructure if needed, and approach the market with confidence. The longer you wait, the more expensive (and stressful) those red flags become.
The Payoff
Don’t underestimate how much legal preparation shapes your final deal price. The cleaner and clearer your business, the more buyers will trust you—and the more they’ll pay. So before you dream up what you’ll do with your post-sale profits, get a lawyer and deal advisor around the table and shine a light into every corner.
Ready to Chat About Your Next Move?
If you’re even thinking about selling your business, our deal advisory team is here to help. No pressure, no jargon. Fill in the form below and we’ll get in touch for a confidential, straight-shooting chat about your options.
