This archive report was first published on 10 July 2019.
Selling a Business in Kenya: Key Considerations ¶
Published on July 10, 2019
When considering the sale of a business, it's essential to understand the key components involved in the process. This includes the type of buy-out, valuing the business, transaction advice, evaluating potential buyers, preparing due diligence information, tax events, and the transition process.
According to experts, the sales process is an intricate one, and business owners should consider hiring external advisors to add value to the transaction and prevent possible missteps. A gazetted and experienced transaction advisor can prove invaluable during the sale process, helping to line up potential buyers and navigate the complexities of the transaction.
Before the process begins, it's crucial to set the minimum attributes you expect of a buyer. These attributes will be critical in evaluating the buyers and include factors like technical expertise, financial capacity, future planning, and compatibility.
Additionally, it's essential to prepare due diligence information, which includes financial performance records, proof of ownership, business licenses, permits, financial obligations, and other relevant documents. This information can be stored in a physical data room or in cloud-based storage.
Finally, it's essential to consider the tax implications of the sale and acquisition of businesses in Kenya. Depending on the approach adopted, there are different tax outcomes, and the current tax position of the business has an effect on its value and the chances of the transaction succeeding.
