Before you sell
Most people sell a company once in their life. What follows is what is worth knowing before you begin — whether you choose us or another buyer. It is not legal or tax advice, and it does not replace your accountant.
Selling the company, or selling the business
At this size the usual route in Portugal is a sale of the share capital — quotas or ações: the buyer takes the company as it stands, with its history, its contracts, its licences and its liabilities. The alternative is a trespasse or asset sale, in which the business transfers but the company does not.
The difference is not technical. It changes the price, the tax, and what happens to contracts, licences and employment. It is worth knowing early which of the two is on the table.
What a serious buyer will want to see
| Accounts | The last three years; the IES is usually enough to begin |
|---|---|
| Customers | What the largest three are worth as a share of turnover |
| Team | How many people, and who supervises the work when the owner is away |
| Licences | IMPIC alvará or título de registo; DGEG installer registration where it applies |
| Tax standing | Clear standing with the tax authority and social security |
| Boundaries | What belongs to the company and what belongs to you: property, vehicles, your own remuneration |
No company is perfectly tidy, and an experienced buyer expects that. What matters is not tidiness — it is that nothing surprising appears halfway through.
Preparing without stopping the business
The two things that weigh most at this stage are not financial. The first is whether the company works when the owner is not there: if it is you they call to quote, to negotiate and to fix, that becomes visible within two weeks of diligence, and it shows up in the price. The second is whether the numbers are reliable — not flattering, reliable.
Neither is fixed on the eve of a sale. If your horizon is a year or two, that is where the time pays best.
Tax, in broad terms
A sale of quotas by an individual gives rise to a capital gain taxed under IRS, category G. Where the holding sits inside a company, different rules apply. And the shape of the deal — cash at closing, deferred payment, keeping a stake — materially changes what is left after tax.
We do not give tax advice, and you should be wary of anyone who gives it before seeing your accounts. Talk to your contabilista certificado early, and to a lawyer before you sign anything. The cost is small against what is at stake.
How long it takes
For a company of this size, four to eight months from first conversation to completion is a fair expectation: a few weeks to a written price, six to ten weeks of diligence, and the remainder in contract and formalities. Much faster usually means someone has not looked carefully; much slower usually means someone lost interest and did not say so.
Warning signs
Four things worth stopping over: a buyer who cannot explain clearly where the money comes from; a price that falls after you have already given the process months; pressure to sign exclusivity before there is a number in writing; and an offer that depends entirely on financing not yet approved.
A first conversation commits you to nothing, and a good buyer has no need to hurry you.
Mistakes to avoid
- Giving a price before the accounts are in order. The first number you say becomes the ceiling of the conversation, and the normalisations you have not yet made typically move the company’s result by more than 30%, almost always in your favour. You gave it away for nothing.
- Talking to many buyers at once. Each of them learns how you work, what you charge and who buys from you, and most of them will not buy. If one of them is a competitor, that cannot be undone.
- The team finding out too early. Six months can pass between knowing and anything being decided, and it is in those six months that the uncertainty does the most damage. When to tell them is yours to choose, but it comes after there is something to tell.
- Accepting exclusivity with no deadline. Exclusivity without a date is an option you granted and nobody paid for: while it lasts you cannot talk to anyone else, and whoever holds it has no reason at all to hurry.
- Signing a letter of intent without understanding what it fixes. Almost all of it is non-binding, and two things genuinely do bind: confidentiality and exclusivity. That is why a letter of intent is read with your lawyer, even when you are told it is only a piece of paper.
What to ask a buyer
- Where does the money come from? A good answer names the source and its state: capital already committed, or financing already approved, or a letter from whoever is putting it up. An answer that speaks of interested investors, or that depends on a bank which has not yet decided, is an answer that the money is not there yet.
- Who decides? A good answer is a name and a mobile number, and the same person who was at the first meeting. If there is a committee, a good answer says when it meets and what has already been put to it.
- What happens to the team? A good answer is specific about the roles that are duplicated between the two companies, because those are the ones at stake, and not a general guarantee that nobody leaves. Ask for the same commitment in writing in the contract, and not in conversation.
- Is there a deadline to resell? A good answer states the deadline, if there is one, without evasion. Anyone with a fund that has an end date has a deadline, and saying so is no fault at all. Anyone who says they have no deadline should be able to explain why in terms of structure rather than intention: who the investors are, what obliges them and what does not.
- Have you bought before? A good answer gives you the name and telephone number of someone who has already sold to them, and lets you call without anyone listening in. If it is a first acquisition, a good answer says so rather than working around it.
- Who is my counterpart? A good answer is that the person negotiating with you is the same person who stays afterwards. If whoever speaks to you today disappears at closing, so does what you were promised.
What kind of buyer is in front of you
| Strategic competitor | Fund | Permanent owner | |
|---|---|---|---|
| Horizon | No deadline, but the decision stops being about your company. It becomes one piece of a larger plan, and the horizon is that plan’s. | Set from the outset, because a fund has a life of its own and investors with a date. Three to seven years is the most common, but there are funds that stay more than a decade, and some of the largest European groups in this sector have been owned by funds far longer than that. | Open-ended, and by structure rather than by promise: there is no fund with a life and no investor with a date to sell. Anyone who tells you "for ever" is making a claim about forty years of two people. What can be claimed is the mechanism. |
| Name | It usually ends up disappearing. While the group serves different customers the local name has value; the day there is a single brand, common purchasing and common logistics, the names stop serving a purpose and go. There are exceptions, and they last as long as the name is what holds the customer base. | It depends on the plan. A fund assembling several companies into a platform will want a single brand before it sells. A fund buying your company on its own has no reason at all to touch the name. | It stays for as long as each company serves its own customers under its own name, and that is how the promise should be read in any group, this one included. |
| Team | There is real overlap and it is honest to say so: invoicing, purchasing, payroll and part of the office exist on both sides. Technical teams usually stay, because they are what the market is short of. | The evidence is better than the reputation. Where funds buy private companies, employment tends to grow in the years that follow, and that is measured across thousands of transactions. Where employment falls is in the purchase of listed companies and in the break-up of divisions of large groups, which are transactions of a different nature. | It stays, because it is what is being bought. A buyer with no technical bench of its own has nothing to replace yours with, and that is the structural guarantee behind the sentence. |
| Who runs it afterwards | As a rule, the group structure. The company starts reporting to a divisional or regional management, and decisions on price, hiring and investment move up a floor. | Day-to-day direction usually stays, and the fund comes in through the board and through a plan with targets. Some bring their own manager; others buy precisely because they do not want to bring one, and there is evidence that those who intervene least do best. | Your management stays and business decisions go on being theirs. There comes to be a board on which we sit, with the chair on our side, and a monthly report. Every serious buyer in the world does this; anyone who tells you they do not is promising what they will not keep. |
| When they resell | It rarely resells, because it integrates. After a while there is no longer a separate company that could be sold. That settles the question for you, and settles it another way. | It sells, and the date is the right thing to ask for in writing. That is not a defect: it is the whole purpose of the instrument, and whoever put the money in has a right to have it back. | That is not what we are building. And because an absolute denial cannot be verified, the commitment we make is a different one: if we ever sell a company in this group, we say which, when and why. |
None of the three columns is the right answer for everyone. If what matters most to you is the highest price the market can give today, and not what happens to the company afterwards, we are probably not the right buyer.
Five things to have in order before you speak to any buyer
- The last three years of accounts closed, and a recent trial balance that agrees with them.
- A drawn boundary between what belongs to the company and what belongs to you: property, vehicles, your own remuneration, and any balances with other companies that are also yours.
- Certidão permanente and pacto social up to date, and every shareholder aware that the conversation is going to happen.
- Clear standing with the tax authority and social security, with the certificates requested.
- One person besides you who can quote, negotiate and fix things, and whom the customer already knows.
If you would like to see how a sale unfolds with us, read our process.