Online Money Manager

Many business vendors reaching what is considered to be normal retirement age do not wish to retire completely. They could believe that a sale of their business coupled with a part-time job with the new owner is a perfect way to ‘phase themselves out’ of business life. Others might feel they cannot afford to retire yet, whilst some will be bound to stay on for a specified period under the sales contract (for example, to maintain client contact). On the other hand, the seller might be staying on, on his insistence, to keep an eye on the business because he has provided vendor finance to the new owners. Because of these various eventualities, it is not unusual for vendors and purchasers to agree that there will be a period in which the vendor will stay on in the business in some capacity or other.

Whatever the reason for staying on, you should be aware that the relationship between a vendor who stays on and the purchaser is seldom a happy one for too long! Many of these arrangements do not last beyond a few months with parties usually delighted when they are brought to a premature end. If staying on after the sale is necessary, it is advisable to keep it as short as possible, unless there are strong personal and contractual reasons why it should be longer.

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