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Selling a sole proprietorship is more difficult than selling a private limited company (BV), because you are personally connected to the business: you cannot transfer shares, but must value and transfer the assets and liabilities separately — and contracts with customers and suppliers only transfer if those parties agree. Below, you can read why the sale is complex, what options you have, and what agreements you need to make.
Why is selling a sole proprietorship so difficult?
In a sole proprietorship, as the owner, you are not separate from the business. This has important consequences:
- Contracts are linked to you. Agreements with customers and suppliers are in your name. In the event of a sale, those parties must agree for the buyer to become the new contracting party — and they do not always want to do so.
- No share transfer. Unlike a private limited company, you cannot sell shares. The assets and liabilities must be valued and transferred separately.
- Difficult valuation. The value of a sole proprietorship is generally more difficult to determine.
How does the sale of a sole proprietorship work?
There are roughly two routes:
- Asset and liability transaction. You carefully list the assets and liabilities and transfer them to another entrepreneur or an acquiring BV. The consent of customers and suppliers is required for the transfer of ongoing contracts.
- First, set up a BV. You transfer the sole proprietorship into a newly established BV and then sell the shares. This also makes it possible to remain involved, for example by retaining a portion of the shares.
TODO_VERIFY: Contributing a sole proprietorship to a BV involves tax implications (such as tax-neutral or taxable contribution) that vary depending on the situation — have this reviewed from a tax and legal perspective.
What agreements do you make during the sale?
Make good agreements with the buyer, the customers, and the suppliers. Consider:
- A non-compete clause: the buyer often wants you, as the seller, not to engage in competing activities for a certain period.
- A transitional period: it may be desirable to continue working for a short time, for example via an employment contract, to identify bottlenecks and guide the transition.
Many more arrangements are possible; a lawyer will advise you on this.
Frequently Asked Questions
Why can't I sell my sole proprietorship via shares?
A sole proprietorship has no shares. You transfer the assets and liabilities separately, or you first contribute the business to a private limited company and then sell the shares.
Do customers and suppliers have to agree to the sale?
For transferring ongoing contracts, usually yes. Because they are in your name, their consent is required to accept the buyer as a new party.
Can I remain involved after the sale?
Yes, for example by first setting up a private limited company and retaining a portion of the shares, or by working temporarily through an employment contract.
What is a non-compete clause in an acquisition?
An agreement that you, as the seller, do not engage in competing activities for a certain period after the acquisition, so that the buyer can retain the acquired customer base.
Need help selling your sole proprietorship?
Selling a sole proprietorship involves many aspects, and taking the right steps is essential. We draft the necessary agreements and ensure that the transfer proceeds smoothly with sound arrangements.
View our corporate law or schedule a no-obligation intake consultation.
