A Pre-Sale Structuring Playbook for Founders 12-24 Months From Exit

How founders should structure holding entities, residency, reliefs and trusts in the 12-24 months before a liquidity event, and the costly mistakes to avoid.

The most valuable structuring decisions a founder makes are rarely made at completion. They are made twelve to twenty-four months earlier, while the business is still growing and the eventual buyer is still hypothetical. By the time a term sheet lands, most of the meaningful planning windows have already closed.

We see this pattern repeatedly. Founders who treat their exit as a transaction to be managed by lawyers and bankers in the final quarter leave value on the table that careful, earlier planning would have preserved. Those who begin while the outcome is still uncertain almost always keep more of what they build.

This playbook sets out how we think about the runway to a liquidity event: the holding structure, residency and tax positioning, the principal reliefs, what to do with the proceeds, and the mistakes that quietly cost the most. None of it is advice for your specific situation, and all of it should be tested against current law in your jurisdictions before you act.

Start With the Shareholding, Not the Sale

Before anything else, look hard at how the shares are actually held today. Many founders are surprised to find that the legal reality differs from their mental model: founder shares sitting personally where a holding company would have been wiser, vesting that was never formally documented, or an option pool that dilutes differently than assumed.

The question we ask first is simple. If the business were sold next week, who would receive the proceeds, in what proportion, and where would they be taxed. The answer often reveals work that should have been done years ago.

A holding structure introduced early can give you flexibility later: the ability to retain some proceeds inside a corporate vehicle for reinvestment, to separate operating risk from accumulated value, or to bring family members into the ownership picture in a measured way. Introduced late, the same structure can look like exactly what anti-avoidance rules are designed to catch.

The general principle holds across jurisdictions. Restructuring with clear commercial rationale, well before a buyer is in sight, is defensible. The same steps taken weeks before signing, with no purpose beyond tax, are not.

Residency and Tax Positioning Take Real Time

Where you are tax resident at the moment a gain crystallises can change your outcome materially. This is the single area where founders most often wish they had moved sooner, because residency cannot be switched on like a light.

Genuine relocation involves real life: where you spend your days, where your family lives, where your home and economic ties sit. Most jurisdictions test substance, not paperwork, and several apply trailing rules that keep you within their net for years after departure. A move made in the final months before a sale invites scrutiny and frequently fails.

If relocation is genuinely on the table, the planning horizon should be measured in years, not quarters. We also caution against tail-wagging-dog decisions. A founder who uproots a family they did not want to move, purely to reduce a tax bill, often regrets it. The cleanest outcomes come when a lifestyle choice and a tax position happen to align, and the move would have made sense regardless.

Understand the Reliefs Before You Rely on Them

Most developed jurisdictions offer some form of relief that reduces tax on the disposal of a qualifying trading business. The United States has its qualified small business stock provisions, often referred to as QSBS, which can shelter a portion of gain on eligible shares held for a required period. The United Kingdom offers Business Asset Disposal Relief, formerly Entrepreneurs' Relief, applying a reduced rate up to a lifetime limit on qualifying disposals.

These regimes share a common theme. They reward genuine, long-held ownership of a trading business and punish structures assembled at the last minute. Eligibility almost always turns on holding periods, the proportion of shares and voting rights you control, the trading status of the company, and your role within it.

The practical lesson is that these reliefs are won or lost early. A holding period that has not yet run cannot be accelerated. A company that has accumulated too much surplus cash or investment activity may have drifted out of trading status without anyone noticing. Both are fixable with time and impossible to fix at the eleventh hour.

We strongly recommend confirming eligibility against current rules with a qualified adviser in the relevant country. These regimes are amended frequently, limits change, and the version you read about online may already be out of date.

Plan for the Proceeds, Not Just the Sale

A surprising number of founders arrive at completion having given no thought to what happens the day after the funds clear. Suddenly a large, concentrated, liquid sum sits in a personal account, exposed to a single jurisdiction, a single currency, and whatever estate rules apply where you live.

Trusts and other long-term holding vehicles can play a legitimate role here, but they work best when established before the gain crystallises rather than after. A properly constituted trust can support succession planning, asset protection and orderly distribution to a family over time. Settled too late, it may achieve far less and attract far more scrutiny.

The same is true of philanthropic structures. Founders who intend to give meaningfully often find that doing so through a structure created before the sale is more effective than writing cheques afterwards.

This is not about secrecy. Modern structures operate within full transparency and reporting regimes. It is about putting the right container in place, with the right governance, before a once-in-a-lifetime sum needs somewhere sensible to live.

The Mistakes That Cost the Most

Some errors recur often enough that we treat them as a checklist.

The first is leaving everything to the deal lawyers. Transaction counsel are excellent at the sale agreement and largely silent on your personal position. The two are different disciplines, and the gap between them is where value leaks.

The second is restructuring too late. Steps with no purpose beyond reducing tax, taken once a buyer is identified, are the textbook target of anti-avoidance rules. Earlier is almost always safer.

The third is ignoring warranties and earn-outs. A meaningful portion of consideration is often deferred or contingent, and its tax treatment can differ sharply from the cash at completion. Founders who model only the headline number are frequently disappointed.

The fourth is poor record-keeping. Reliefs and residency positions live or die on evidence. Board minutes, share registers, day-count records and contemporaneous documentation are unglamorous and decisive.

The fifth, and perhaps the most human, is secrecy within the family. Founders who plan a major liquidity event without preparing those who will be affected by it often create friction that no structure can resolve.

How We Approach the Runway

When we work with a founder approaching an exit, we begin by mapping the present reality: who owns what, where, and under which rules. From there we model the likely outcome under the current structure and compare it against a small number of defensible alternatives.

We coordinate rather than replace the specialists. Local tax counsel, transaction lawyers and accountants each own their domain, and our role is to ensure the personal and structural picture is coherent across all of them, in every jurisdiction that touches the deal.

Above all, we favour decisions that would stand on their own commercial feet even if the tax treatment changed. Structures built only for a tax outcome are fragile. Structures built for genuine reasons, that happen to be tax-efficient, tend to endure.

If you are twelve to twenty-four months from a possible exit, that is precisely the moment to start. The earlier you map the ground, the more options remain open, and the fewer of them close quietly while you are busy running the business.