Negotiate and close
Multiple bidders = leverage. Use it without burning the relationship with your eventual buyer.
Key negotiation levers
- Price (obviously) — but also cash-at-close vs deferred
- Working capital target — defines the 'normal' level you must leave in the business
- Warranties cap — try to limit to 25–50% of price, 12–24 months
- Earn-out structure if used — keep the metric simple (revenue / EBITDA) and the period short (12–24 months)
- Non-compete scope — accept reasonable; reject anything that bars you from the broader sector or wider geography
- Transition support — define hours, duration, and compensation
Tax planning before signature
Capital Gains Tax in Kenya is 15% on the gain. Structuring (share vs asset, holding-company route, instalment receipt) can materially change your after-tax outcome. Engage a tax advisor before the SPA is final, not after.
Closing day
- Cleared funds (or escrow release authorisation)
- Signed SPA and share transfers
- Stamp duty paid on share transfers (1%)
- BRS filing within 14 days — new directors, shareholders, beneficial owners
- KRA notification of change in ownership
- Resignation letter (if you're exiting fully)
- Handover plan executed: bank signatories, IT, suppliers, key customer intros
If part of your price depends on post-close performance, negotiate clear governance rights: monthly P&L access, veto over major decisions affecting the metric, and accelerated payout on change-of-control. Buyers can — and do — quietly suppress earn-out metrics. Paper protects you.
The information in this guide is provided for general guidance only and is subject to change. Fees, timelines, and regulatory requirements in Kenya are updated regularly. Before acting, please confirm details with the relevant authority (KRA, eCitizen, BRS, county government, or other regulator) or speak with a qualified MyBiashara advisor. MyBiashara is not liable for decisions made solely on the basis of this content.
