Business.govt.nz says a sound succession plan can take years and recommends setting goals, identifying assets and liabilities, establishing a timeframe, obtaining advice, documenting the plan, and reviewing it regularly. That planning period is different from the buyer transaction itself.
A useful way to think about timing is through gates rather than promised months. Each gate is complete when the necessary decisions, evidence, advice, and approvals are ready for the next stage.
Process overview
- Define succession goals and sale readiness.
- Appoint advisers and control confidentiality.
- Prepare financial, commercial, legal, employee, and regulatory information.
- Consider asset-sale and share-sale implications.
- Identify and assess potential buyers.
- Exchange preliminary information and proposals.
- Agree heads of terms or another preliminary framework.
- Complete due diligence and transaction documents.
- Obtain approvals, consents, and complete employee processes.
- Settle, hand over, and complete post-settlement obligations.
Stage 1: Define your goals and readiness
Before approaching buyers, decide what you want from ownership succession and test whether the business is ready to support a process.
- desired timing and degree of owner exit
- financial and non-financial priorities
- brand, employee, customer, and management preferences
- willingness to retain equity, provide finance, or accept contingent consideration
- owner dependence and management succession
- known financial, contractual, regulatory, property, employment, or tax issues
Use the NZ business sale preparation checklist and compare wider business succession options before assuming a sale is the only path.
Stage 2: Appoint advisers and set confidentiality controls
The adviser team depends on the business and process. It may include legal, accounting, tax, valuation, corporate-finance, employment, property, regulatory, or wealth specialists. Define each adviser's scope, responsibility, fees, conflicts, and decision authority.
Plan confidentiality before sharing sensitive information. Consider who can know, when employees and counterparties may need to be informed, what information a prospective buyer receives at each stage, and how access is recorded and withdrawn.
Stage 3: Prepare the evidence
Buyers need information to assess value, risk, structure, and transition. Preparation should make the business understandable without disclosing everything to every interested party at once.
| Workstream | Examples |
|---|---|
| Financial | accounts, tax records, current trading, working capital, debt, assets, forecasts, adjustments |
| Commercial | customers, contracts, concentration, retention, pricing, suppliers, pipeline |
| Corporate and legal | ownership, governance, disputes, insurance, intellectual property, material agreements |
| Employees | agreements, roles, remuneration, leave, claims, visas, key-person dependencies |
| Operations | systems, processes, capacity, quality, property, equipment, maintenance, cybersecurity |
| Regulatory | licences, permits, registrations, audits, incidents, remediation, qualified people |
For the financial concepts a buyer or valuer may examine, read how business valuation works in New Zealand.
Stage 4: Consider asset-sale and share-sale implications
Inland Revenue states that asset and share sales have different tax consequences. An asset sale identifies the assets being transferred and requires the parties to agree how the price is allocated between asset classes. That allocation generally affects both parties' tax positions.
A share sale transfers shares in the company that owns the business. The company remains the legal entity holding its assets, contracts, liabilities, and employees, subject to agreement terms, change-of-control provisions, and other legal issues.
This stage is not a one-time choice made in isolation. Buyer preference, tax, liabilities, contracts, employees, licences, funding, consents, and risk allocation can affect the structure. Model the alternatives with advisers before commercial terms become difficult to change.
See the dedicated asset-sale versus share-sale guide for the seller-side comparison.
Stage 5: Identify and assess buyers
A buyer list may include family, managers, employees, trade buyers, financial sponsors, permanent holding companies, or other qualified parties. Decide whether the process is direct, adviser-led, targeted, or broader.
Assess identity, ownership, funding, approvals, strategy, operating plan, transaction record, confidentiality, and fit with your goals. Use the NZ buyer comparison framework and buyer-selection scorecard rather than assuming outcomes from buyer labels.
Stage 6: Exchange preliminary information and proposals
Initial disclosure should establish fit without exposing unnecessary customer, employee, pricing, or technical detail. Depending on the process, a buyer may receive a summary, sign a confidentiality agreement, review staged information, meet management, and submit an indicative proposal.
An indicative proposal is not the final transaction. Establish:
- what is being acquired
- headline valuation basis and proposed adjustments
- cash, deferred, contingent, financed, or rollover consideration
- funding and internal approvals
- diligence scope and access requested
- conditions and expected consents
- seller transition and proposed operating model
- exclusivity and target process dates
Stage 7: Agree preliminary terms
The parties may use a letter of intent, heads of terms, term sheet, or another preliminary document. Its legal effect depends on drafting and circumstances, so obtain legal advice before signing.
Clarify which provisions are binding, what remains subject to diligence and documentation, exclusivity, confidentiality, access, costs, governing law, termination, and how either party may stop the process.
Stage 8: Complete due diligence
Due diligence tests the buyer's assumptions and identifies matters for price, structure, conditions, warranties, indemnities, remediation, or withdrawal. The scope depends on the business and buyer.
- financial and tax
- commercial and operational
- corporate and legal
- employment and health and safety
- property and environmental
- technology, privacy, and cybersecurity
- regulatory, licensing, and industry-specific compliance
Track requests, answers, source documents, open issues, and who has access. Correct errors rather than allowing inconsistent explanations to accumulate.
Use the NZ seller due-diligence checklist to organise each workstream, staged disclosure, privacy controls, and the seller-side issue register.
Stage 9: Negotiate transaction documents
Documents may include a share or asset sale agreement, disclosure letter, tax deed, escrow or retention arrangements, vendor-finance documents, employment or consulting terms, transition services, property documents, and third-party consents.
Key economic and risk areas can include purchase-price adjustments, working capital, debt, conditions, warranties, indemnities, liability limits, insurance, restraint terms, earn-outs, conduct before settlement, and termination rights.
Stage 10: Address employees, approvals, and consents
Employment New Zealand explains that an asset sale can create technical redundancy where employment with the seller ends and employees are offered employment by the buyer. A share sale generally does not change the employing entity. Employment agreements must contain employee-protection provisions for relevant restructuring situations, and specified employees can have additional protections.
Employee steps, communication, privacy, consultation, offers, and timing depend on the transaction. Review the NZ employee implications guide and obtain employment-law advice before communicating commitments.
Other requirements may include buyer funding approval, board or shareholder approval, regulatory approval, landlord consent, customer or supplier consent, lender releases, licence applications, or change-of-control notices.
Stage 11: Settlement and handover
Settlement occurs when the agreed conditions and completion steps are satisfied or waived in accordance with the documents. Confirm funds, share or asset transfers, releases, registers, keys, systems access, authorities, notices, and required filings.
The handover plan should identify who owns each action, what knowledge must transfer, how customers and suppliers are informed, what role the seller has, and how unresolved issues are escalated. Use the owner-transition guide to map dependencies, retained roles, and objective completion evidence.
Stage 12: Post-settlement obligations
Settlement may not end every obligation. Completion accounts, working-capital adjustments, tax filings, escrow releases, warranties, indemnity claims, earn-outs, vendor-finance payments, consulting duties, restraint obligations, or regulatory steps may continue.
Inland Revenue notes that after a business sale there can still be tax matters such as final returns, remaining tax, and changes to registrations. Confirm the required actions with your advisers.
What controls the timeline?
No buyer type or process can guarantee a completion date. Common timing drivers include:
- seller readiness and information quality
- buyer funding and internal approvals
- complexity of assets, entities, contracts, property, and regulation
- financial, tax, legal, employee, and compliance issues
- third-party consents and regulatory approvals
- negotiation of price, risk, and transaction documents
- employee process and communication requirements
- availability and responsiveness of decision makers and advisers
Use a live issues list with owner, dependency, target date, and evidence required. A timetable is a management tool, not a promise of completion.