The decision has been made. The company is to be sold, and after an extensive search, a suitable successor has finally been found with whom an agreement has been reached on the terms of the sale. However, this does not mean the sale of the company is complete. Now it’s time to structure the handover process. On the one hand, organizational matters must be taken care of; on the other, the internal handover awaits.
Communicating the Business Transfer to Key Parties
Various parties must be informed of the change in ownership. Depending on the type of business, you’ll need to file a change of ownership with the relevant authorities, such as the Trade Licensing Office, the Chamber of Industry and Commerce (IHK), or the Chamber of Crafts. The workers’ compensation association must also be notified of the change in ownership.
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The tax office and the company’s primary bank also need to be notified. Insurance policies or contracts with utility providers (such as telecommunications companies) may need to be canceled or at least transferred to the new owner’s name. In their own interest, the seller should ensure that their name is removed from all important contracts and public records.
To support the successful continuation of the business they have painstakingly built up, the seller can provide their successor with comprehensive training during the transition phase and share company-specific knowledge.
The handover process makes it easier for buyers to get started
For the buyer, the internal handover is very important. It allows them to quickly familiarize themselves with business processes and avoid many potential mistakes. They should therefore view tips on operational procedures not as patronizing, but as support, and ensure they receive as much useful information as possible.
Ideally, the former and new owners work closely together during the handover phase—including on organizational matters. In addition to public institutions, various stakeholders of the company must be informed about the sale during a business takeover. To make the transition easier, the new owner should have their predecessor introduce them to key customers, suppliers, and other business partners—preferably in a face-to-face meeting.
Make the Process Transparent from the Start
To avoid unnecessary friction, the framework conditions for the handover process are set forth in the purchase or transfer agreement. The two contracting parties agree on the respective duties and responsibilities they will assume and define the scope of their authority.
Above all, it should be clear to what extent the seller will be involved in the handover process. A timeline is also helpful: When should the “new owner” become actively involved in the business, and when will the “former owner” step back from day-to-day operations? And will the former owner remain with the business for a while longer as a consultant? His knowledge and contacts could be an advantage for the newcomer—at least as long as the relationship between the two remains positive.
