For most business owners, selling means moving on. But in some circumstances, buyers want—or sellers prefer—some level of continued involvement after completion. This might be a short handover period to ease the transition, or a more structured arrangement like employment, consultancy, or retained shareholding.
If you’re exploring what post-sale involvement might look like, this guide explains the main options, when they’re typically used, and the practical and legal considerations for each.
Why buyers sometimes want sellers to stay involved
Buyers benefit from continuity during the transition, particularly if the seller has established client relationships or specialist expertise that can’t easily be transferred through documentation alone. In many cases, the seller’s involvement reduces risk for the buyer and increases the likelihood of a smooth handover.
For sellers, staying involved can provide additional financial benefits through earn-out agreements or retained shareholdings, particularly if there’s a gap between the seller’s valuation and what the buyer is willing to pay upfront. It can also ease the emotional transition of stepping away from a business you’ve spent years building.
The four main post-sale involvement options
Post-sale arrangements generally fall into four categories, each with different levels of commitment, control, and compensation.
1. Handover period
A handover period is the most common and straightforward arrangement. You remain available for a defined period—typically one to six months—to introduce the buyer to key clients and suppliers, answer questions about operations, and generally ease the transfer of ownership.
Key features:
- Usually documented in the sale and purchase agreement (no separate contract)
- Compensation often built into the sale price (or nominal daily rate)
- No ongoing control—you’re there to advise, not make decisions
- Time commitment tapers off as the buyer gains confidence
The critical point with handover periods is clarity. Vague commitments like “I’ll be available if you need me” lead to boundary issues. Be specific about the number of days, level of involvement, and when the handover formally ends.
2. Employment contract
If the buyer needs you to remain actively involved in running the business, you might continue in an employment role—typically in senior management or an operational capacity. You’ll work under a formal employment agreement with defined hours, responsibilities, and reporting lines.
This structure works when your operational expertise is critical to the business, or when the buyer needs your client relationships during a transition period. Fixed-term contracts are common, however, the challenge is managing the psychological shift from owner to employee—you’re no longer in charge.
3. Consultancy arrangement
For sellers who want involvement without the commitment of employment, consultancy offers flexibility. You provide advice on a project basis or through a retainer, without day-to-day operational responsibility.
Key features:
- Structured through a consultancy agreement (often via your own limited company)
- Consultancy fees (daily/monthly rate or retainer)
- No operational control—purely advisory
- Flexibility over how and when you work
If your arrangement looks like you’re doing your old job under a different label, this could raise IR35 issues. A well-drafted consultancy agreement is essential.
4. Retained shareholding
This involves ‘rolling over’ a percentage of your shares (typically 10-30%) into the new ownership structure, which is most common in sales to private investors, where the buyer wants you financially invested in future growth.
Key features:
- You remain a shareholder, receiving dividends and benefiting from future sale proceeds
- Usually includes a board seat, giving you influence on strategic decisions
- As a minority shareholder, you don’t have control over day-to-day operations
- Requires a shareholders’ agreement defining rights, obligations, and exit mechanisms
Retained shareholdings are often combined with other post-sale roles, particularly during earn-out periods. The main consideration is alignment—your financial return depends on the new owner’s success, so you need to trust their strategy.
Post-sale involvement and earn-out agreements
Earn-out agreements—where part of the purchase price is paid later, contingent on performance targets—almost always involve the seller remaining involved during the earn-out period (typically 12-24 months). This works for both parties: the seller has a direct financial interest in hitting targets, and the buyer benefits from the seller’s expertise during the transition.
The form of involvement varies but is usually structured as employment or consultancy. Earn-outs can help bridge valuation gaps, but they come with risk. If targets aren’t met due to market conditions, buyer decisions, or other factors outside your control, you don’t receive the deferred payment. Make sure earn-out metrics are measurable, achievable, and clearly defined.
For more detail, see our article on What is an Earn-Out Agreement when selling a business?
Tax and legal considerations
Different post-sale structures have different legal and tax implications. The structure you choose affects your tax position, your legal rights and obligations, and what you can do after the sale. These considerations are complex and specific to your circumstances. Always seek specialist tax and legal advice before committing to any post-sale arrangement.
Things to consider
The decision depends on your goals, the business context, and practical circumstances. Consider how much time you want to commit after the sale, whether continued income matters or you’re prioritising a clean financial break, how emotionally ready you are to step back, how dependent the business is on your relationships and expertise, what the buyer prefers, your retirement plans, and your risk tolerance with earn-outs and retained shareholdings. The best structure ultimately aligns your goals with the buyer’s needs whilst giving you clarity about what comes next.
How we can help
Whether you’re looking for a clear exit or exploring post-sale involvement, our advisers can guide you through the options. If you’re considering selling and want to understand what post-sale involvement might look like in your situation, contact a member of the Selling My Business team today.
