Is this still a sale of my business?

Yes. Transferring a majority shareholding is a disposal of shares, so capital gains tax applies and Business Asset Disposal Relief may be available. There is a share purchase agreement, warranties and a completion date, as with any sale. What differs is what happens afterwards: you keep 25% and the business carries on under the same name with the same staff.

What happens to my 25% shareholding?

You keep it for as long as you want it. It entitles you to dividends once the acquisition borrowing is serviced, and to a share of the proceeds whenever the business is eventually sold. If you would rather be bought out at a fixed point, that can be written in.

What if the business has a bad couple of years?

The deferred element of your price is secured, so it is not dependent on trading. Your 25% shareholding does carry risk in proportion to the holding, in the same way it does now. The distinction matters: the money you are owed is protected, the equity you have chosen to retain is not.

How a handover works — majority stake, you keep 25%

What actually changes on completion day

I acquire 75% of the shares and take over running the business. You keep 25%. The company keeps its name, its people, its premises and its customers. Nothing is merged into anything, and nothing is prepared for resale.

The practical change is that the decisions become mine. Pricing, hiring, investment, which work to take on. I am not an investor appointing a managing director — I run it, and I am there most days to begin with.

What does not change is the company. Same employer for your staff, same name on the gate, same people answering the phone to your customers.

What you receive, and when

Three parts, and the balance between them is a conversation rather than a formula.

At completionA cash payment. The size depends on what the business can support in borrowing and what I can raise — generally a meaningful proportion rather than all of it.

Over the following yearsThe balance of the price for the 75%, paid in fixed instalments. Secured against the company's assets, so it does not depend on how trading goes.

Your retained 25%Dividends once the acquisition borrowing is serviced, and a quarter of the proceeds whenever the business is eventually sold.

Why the deferred part is secured

You will find plenty of deals where the balance is unsecured and paid out of future profits. That makes the seller an unsecured creditor of a company he no longer controls — and if it struggles he is both poorer and powerless.

I think that is an unreasonable thing to ask of somebody who has just handed over his life’s work, particularly when the person running it afterwards is me. So the deferred consideration is secured and the instalments are fixed, not linked to performance. If the payout depended on profits I control, you would be right not to trust it.

Being straight about the 25%

Your retained shareholding is a share of what the business becomes, not a pension.

In the early years the company is servicing acquisition borrowing. Dividends come after that is covered, and in year one or two there may be none at all. Anyone who tells you otherwise has not modelled it.

What the 25% is genuinely good for is the upside. If the business earns £900,000 today and is worth four times that, and three years of proper systems and investment take it to £1.3m at a slightly better multiple, a quarter of the difference is a substantial sum — considerably more than the extra cash you would have taken at completion instead.

That is the trade, stated plainly: less certainty now, more if it goes well. It is the right trade for an owner who believes in the business and wrong for one who needs the money in the bank.

If you would rather have the money now

Say so, and we will structure it that way instead — a larger payment at completion, a smaller or no retained stake, and I carry more of the financing.

It costs you the upside and it buys you certainty. For a lot of owners at this stage of life that is exactly the right exchange, and I would rather do the deal that suits you than talk you into the one that suits me. The conversation only works if you tell me which you actually want.

What you do afterwards

A handover of some length is always needed — introducing customers, explaining how things are priced, walking me through the systems and the quirks. How long depends on the business: a few months is typical, sometimes longer.

After that it is up to you. Some owners want a continuing part-time role. Some want a board seat and quarterly numbers and nothing else. Some want to be gone by Christmas. All three are fine, and you can change your mind.

What I would ask is that the handover is real. The value I am paying for is partly in your head, and the only way it transfers is if you spend the time moving it.

The honest limits

I take control. Seventy-five per cent and operational control means the decisions are mine, including ones you would have made differently. If that would be hard to watch, this is not the right arrangement and it is better to know now.

Your minority stake is not easily sold. A 25% holding in a private company has no market. Its value is realised when the whole business is sold, or if I buy you out by agreement. That should be written into the shareholders’ agreement at the outset rather than left to goodwill.

You should take advice. Your own solicitor and accountant, not mine. Anything I have described here should be checked by somebody acting for you, and if your adviser tells you a term is unreasonable, I would rather hear it than have you sign something you are uneasy about.

There is more on the alternatives — including a management buyout, an employee ownership trust or closing it — and on how the price is reached.

I take over and run it. You keep a quarter of what it becomes.