A sale to management has advantages and disadvantages. Advantages are that employees are familiar with the business being sold and this may limit their need for full representations and indemnities. Further, selling to an employee increases the likelihood of retaining employees and the seller may be able to maintain control over the sale process.
Sale To EmployeeFrame Legal, LLC
Oftentimes, business owners conduct a sale to employees rather than a sale of their business to third parties. A sale to employees is often a sale to management. This is known as a management buyout. A sale to employees may also be in the form of an employee stock ownership plan (ESOP). At Frame Legal, our Charleston business lawyer guide our clients through the process of negotiating a sale to employee, the closing of a sale, and the post-closing procedures involved in the sale of business to employees.