How to Structure a Business Sale for Maximum Benefit
- Tony Vaughan
- Sep 2
- 3 min read
When it comes to selling your business, price is important — but structure can make all the difference. The way a deal is put together often determines how much value you walk away with, how smoothly the transition takes place, and how secure your future is after the exit.
A poorly structured deal can mean unexpected tax liabilities, delayed payments, or future disputes with the buyer. By contrast, a well-structured sale can maximise value, protect your interests, and create opportunities for ongoing income or involvement.
Understanding your priorities
Before negotiating the structure of a sale, it’s essential to define what matters most to you:
A clean break and immediate exit
Tax-efficient proceeds
Protecting employees and legacy
Continued involvement with future upside
Managing risk if the buyer underperforms
Knowing your priorities early helps you and your advisers design the right deal.
Share sale vs. asset sale
One of the first structural decisions is whether the transaction is a share sale or an asset sale.
Share sale: The buyer acquires the shares of the company, taking on both assets and liabilities. This is often more tax-efficient for the seller and provides a clean break.
Asset sale: The buyer only acquires selected assets and liabilities. This can reduce their risk but may be less favourable for the seller in tax and practical terms.
The best option depends on your business model, sector, and buyer appetite.
Payment structures
Not all deals are paid in cash at completion. Buyers often propose staged or conditional payments, which can significantly affect the seller’s risk and reward. Common structures include:
Cash on completion – The simplest and most desirable outcome for sellers, but not always achievable.
Deferred consideration – A portion of the price is paid later, often linked to performance milestones.
Earn-outs – Payment is tied to the future performance of the business. This can be attractive if you believe in the growth potential, but risky if future performance is outside your control.
Equity rollover – You retain shares in the business or its parent company, allowing you to benefit from future growth alongside the new owner.
The right mix depends on your risk appetite and whether you want ongoing involvement.
Tax planning
The structure of a deal has major tax implications. In the UK, Business Asset Disposal Relief (BADR) may allow qualifying sellers to pay just 10% capital gains tax on the first £1 million of lifetime gains. However, eligibility depends on how the transaction is structured and how the business has been run in the years prior to sale. Other considerations include:
The timing of payments
Whether the deal is structured as a share or asset sale
The treatment of any earn-outs or deferred payments
Specialist tax advice is essential to ensure you keep as much of the proceeds as possible.
Protecting your position
While the buyer will push for warranties, indemnities, and restrictive covenants, it’s equally important to negotiate terms that protect you. This includes:
Caps and time limits on warranty claims
Clear definitions for any earn-out metrics
Reasonable restrictions on future activities
Balancing buyer reassurance with seller protection is a key part of deal structuring.
Strategic partnerships and partial exits
Not every sale has to be an all-or-nothing exit. Some owners choose to sell part of their business to a private equity investor or trade buyer, retaining a stake to benefit from future growth. This can reduce personal risk, release capital, and create a “second bite of the cherry” when the business is sold again at a higher valuation.
A well-structured business sale can unlock far more value than simply chasing the highest headline price. By carefully balancing tax efficiency, payment terms, buyer protections, and your personal goals, you can maximise the long-term benefit of your exit.
At BusinessExits.co.uk, we help business owners prepare and negotiate the right structure to achieve their objectives — whether that’s a clean retirement exit, an ongoing partnership, or securing the best deal for the next generation.
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