Exit Planning India.
Know exactly where you stand.

The best time to start exit planning is 3–5 years before you want to complete the transaction. This allows time to: build an independent management team (reducing key-person dependency), create 3+ years of clean audited accounts and MIS, improve EBITDA margins and working capital to maximise the valuation multiple, resolve any legal, tax, or compliance issues, and position the business in the market to attract the right buyers. Exits attempted with less than 12 months of preparation almost always result in lower valuations, failed deals, or unfavourable terms.

Business transferability is the ability of the business to generate the same revenue, margin, and customer relationships after the owner exits. It is the most critical exit value driver for Indian SMEs. Low transferability businesses — where the owner is the primary salesperson, key customer relationship holder, or operational decision-maker — receive a significant valuation discount (20–40%) because buyers price in the risk that value will walk out with the seller. Building transferability means: documenting all processes, creating a second layer of management capable of running the business, delegating key customer relationships to the management team, and demonstrating at least 6–12 months of stable performance without direct owner involvement.

For sale of shares in an Indian private company by an Indian resident: Short-term capital gains (STCG) — if held for less than 24 months: taxed at the applicable income tax slab rate. Long-term capital gains (LTCG) — if held for 24 months or more: taxed at 20% with indexation benefit. For sale of business assets (not shares): taxed as STCG or LTCG depending on the holding period of the assets; business goodwill is a capital asset. Tax-efficient exit strategies include: holding shares through a holding company (potentially tax-efficient restructuring), structuring the deal as a share sale vs. asset sale, and phased consideration structures that defer tax liability. IBEAN's tax planning for exits covers all of these considerations.

An Information Memorandum (IM) is a detailed document prepared by the seller to present the business to potential acquirers. A well-prepared IM covers: business overview and history, products/services and market positioning, financial summary (3–5 years), management team profiles, growth strategy and pipeline, operational overview, and the investment opportunity (what the acquirer gets and why now). An IM is essential for any structured exit process where you are approaching multiple buyers simultaneously. It saves time, ensures consistency of message, and demonstrates the professionalism that serious acquirers expect. IBEAN prepares the IM as part of the exit advisory engagement.