Strategies for Managing Employees During a Business Sale

Relevant For:

Business owners with employees who are planning to sell their business.

Key Points:

  • Understand the impact of sale structure (entity vs asset) on employee entitlements.
  • Options for purchasers: no employment offer, offer without prior service recognition, or offer with recognition.
  • Terminate employees and pay entitlements if no employment offer is made.
  • Reset entitlements if hiring without prior service recognition.
  • Negotiate purchase price adjustments if recognising prior service.
  • Early discussions with purchasers about employee entitlements are crucial.
  • Plan termination notices and employment offers for a smooth transition.

Full Article:

When selling your business, it's crucial to consider the fate of your employees. Failing to plan for their transition can result in significant costs and disrupt the smooth transfer of the business to new owners.

Here’s how to effectively manage employee issues during a business sale.

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