A business is sold largely on its customer relationships. If those relationships exist only in people’s heads and a decade of invoices, a buyer cannot see what they are buying — so they price the doubt.
What Due Diligence Finds
With remarkable consistency: key customers with no written contract at all. Contracts that expired years ago and continue on their original terms by habit, which means either party can walk. Terms of business referred to but never actually sent or accepted. Supplier arrangements agreed verbally, sometimes with pricing nobody can now evidence. Distribution or agency arrangements without written terms. And — the ones that change a deal structure rather than just a price — contracts containing change-of-control clauses or assignment restrictions, which hand a counterparty a veto or an exit precisely when the business is being sold. None of that is unusual in an owner-managed business, and none of it reflects badly on how the business is run. It simply means that at the moment of sale, the seller cannot demonstrate what the buyer is acquiring.
What to Do About It
Start with the material relationships rather than all of them — the customers and suppliers the business genuinely depends on. For each: is there a written agreement, is it current, what are the termination provisions, and does it restrict assignment or contain a change-of-control right. Where there is nothing in writing, getting terms agreed and signed is usually straightforward in the ordinary course of business, and enormously easier before a sale is in prospect than during one — because approaching a key customer for a signed contract while a sale is running risks disclosing the sale, which is commercially sensitive and can unsettle the relationship. That timing point is the reason this belongs on a list started a year or two out rather than the week a buyer appears. Two further items usually found alongside: check that IP, domains and software licences sit with the company rather than an individual, because on a share sale anything held personally does not come with the company; and check that employment terms are in writing, since on an asset sale employees transfer with whatever the position actually is.
The reading exercise pays twice. Documenting contracts defends the price, and reading them identifies every consent your deal will need — which is what keeps a completion timetable realistic instead of slipping repeatedly.
Preparing for a sale? 01 5827148.
Richard O’Shea — Solicitor & TEP
Solicitor at Mary Molloy Solicitors, established 1981, and a TEP of the Society of Trust and Estate Practitioners. The firm acts for buyers and sellers on business sales and acquisitions — structure, heads of terms, due diligence, the sale agreement, warranties and disclosure, completion and what follows it. Because a substantial share of Irish business sales are retirement exits, the firm’s estate and succession practice sits alongside the transactional work: the deal and what happens to the proceeds are usually the same client’s problem. Nothing here is tax advice — structure is tax-driven and that belongs with your accountant and Revenue, before heads of terms are signed. 01 5827148 · richardoshea@marymolloysolicitors.com · LinkedIn
General information, not legal advice. This website contains general information about Irish law on business sales and acquisitions. It is not legal advice and does not create a solicitor—client relationship. Every transaction turns on its own facts — the structure, the documents, the parties, the consents required — and advice on yours requires a consultation.
Nothing here is tax advice, and tax drives structure. The choice between an asset sale and a share sale is very largely a tax question, and it should be settled with your accountant or tax adviser, and by reference to Revenue’s own guidance, before heads of terms are signed rather than afterwards. This firm does not advise on tax, does not state rates, thresholds, reliefs or conditions, and does not indicate any tax outcome.
No valuation advice. This firm does not value businesses, does not suggest multiples and does not advise on price. Valuation is for accountants and corporate finance advisers, and it is a separate exercise from the legal work.
Never both sides of the same deal. The firm acts for buyers and, in separate transactions, for sellers — but never for both parties to the same sale. Conflicts are checked at first contact, before any substantive discussion, which is why the first email should name every individual and entity involved.
No outcome or timeline is promised. Nothing on this site states or implies that a transaction will complete, that a consent will be obtained, that a warranty claim will succeed, or that any deal will proceed to a particular timetable. Where another jurisdiction is involved, the law of that jurisdiction applies to what happens there and requires local advice; this firm advises on Irish law only.
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