Buying a Business

Legal due diligence is the process of investigating the business you intend to buy before you commit to the transaction. It helps identify legal risks, liabilities and obligations that may affect the value or operation of the business.

Depending on the transaction, the review may cover company records, commercial contracts, employees, property, intellectual property, regulatory compliance, insurance and any existing disputes.

In a share purchase, you acquire the company itself, including its assets, contracts, employees and liabilities. In an asset purchase, you acquire selected assets and liabilities from the business.

Each structure has different legal, tax and commercial implications. We will work with you and your tax advisers to help identify the most appropriate approach for your proposed acquisition.

A Share Purchase Agreement is the main contract used when buying shares in a company. It records the purchase price, payment terms, warranties, indemnities, completion arrangements and other agreed protections.

The agreement should reflect the commercial terms of the transaction and provide suitable protection against liabilities or issues that were not fully identified before completion.

An Asset Purchase Agreement sets out the terms on which selected assets and liabilities of a business are transferred to the buyer. These may include equipment, stock, contracts, property, goodwill, intellectual property and employees.

The agreement should clearly identify what is included, what is excluded and which liabilities will transfer as part of the purchase.

Warranties are contractual statements made by the seller about the condition and operation of the business. They may cover accounts, tax, contracts, employees, property, intellectual property, regulatory compliance and disputes.

Appropriate warranties can provide important protection if information supplied during the sale process later proves to be inaccurate or incomplete.

The liabilities you may inherit depend largely on whether the transaction is structured as a share purchase or an asset purchase. In a share purchase, the company retains its existing liabilities, including contractual, employment, tax and regulatory obligations.

Due diligence, warranties and indemnities can help identify and manage these risks before the acquisition completes.

In a share purchase, employees usually remain employed by the same company. In an asset purchase, the Transfer of Undertakings (Protection of Employment) Regulations, commonly known as TUPE, may apply.

TUPE can transfer employees and their existing employment rights to the buyer. We can advise on consultation requirements, employee information and how employment liabilities should be addressed.

The timescale depends on the size and complexity of the business, the amount of due diligence required, the availability of finance and how quickly the parties agree the transaction documents.

A straightforward acquisition may complete within a few months, while more complex transactions can take longer. Clear Heads of Terms and prompt access to information can help keep the process moving.

Yes. Depending on your objectives, you may be able to purchase selected assets, a particular division, a controlling shareholding or a minority interest in a company.

The legal structure and documents required will depend on what is being acquired and how control, decision-making and future investment will be managed.

Most buyers will benefit from coordinated advice from corporate solicitors, accountants and tax advisers. Depending on the transaction, you may also need support from finance providers, commercial property lawyers, employment specialists or sector-specific consultants.

Wollens can work collaboratively with your wider professional team throughout the acquisition.

Legal costs depend on the value, structure and complexity of the transaction, the amount of due diligence required and the level of negotiation involved.

Once we understand the proposed acquisition, we can explain the likely scope of work and provide clear information about our fees and any additional costs.

Buying a business can involve significant legal and financial risk. A solicitor will help structure the transaction, investigate the business, identify liabilities and negotiate the purchase agreement and contractual protections.

Our Corporate & Commercial team will help you understand exactly what you are buying and support you from the initial Heads of Terms through to completion and post-completion matters.