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Q: What are the pros and cons of selling?

So if you have a limited company, Mr Hudson said you will prefer to have the shares purchased.

However, Mr Hudson said this may conflict with the acquirers tax position and should therefore form part of the negotiations.

Most acquirers will prefer to purchase the clients, good will and historic commission agencies, Mr Hudson said.

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Phil Young, managing director of Threesixty Services, said full disposal of shares in the business was usually better for the seller as it was taxed as capital gains tax (CGT) and entrepreneurs’ relief can be used.

Buyers often avoid this as they also buy the risk in the business, including previous advice, tax and legal liabilities, etc, he said.

The converse is true for purchase of goodwill but sometimes, Mr Young said a buyer will pay a higher multiple to avoid buying the risk, which more than compensates for the tax disadvantages.

It is a negotiation point, he added.

He said: “It is essential for buyers to examine how purchase of goodwill effects their capital adequacy requirements as purchased goodwill cannot be used as a credit on their balance sheet.

“In many cases solicitors and accountants will have different approaches to these issues. It is important they understand each other’s point of view to get the right commercial outcome.”