Selling A Business

Preparing early can help improve buyer confidence and reduce delays. You should ensure that your company records, contracts, employment documents, intellectual property arrangements, property documents and financial information are accurate and up to date.

Our Corporate & Commercial solicitors can review your legal documentation before the sale process begins, identify issues that may concern a buyer and help you address them before due diligence starts.

In a share sale, the buyer purchases the shares in the company and takes ownership of the business together with its assets, contracts and liabilities. In an asset sale, the buyer acquires selected assets and liabilities from the business.

The most appropriate structure will depend on the commercial, legal and tax circumstances of the transaction. We will work with you and your tax advisers to help determine the best approach.

Legal due diligence is the process through which a buyer investigates the business before completing the purchase. The buyer will usually review company records, commercial contracts, employment arrangements, property, intellectual property, regulatory matters and any existing disputes.

We help sellers organise the required information, respond to enquiries and manage the process efficiently while protecting commercially sensitive information.

A Disclosure Letter is a document in which the seller provides information that qualifies the warranties contained in the purchase agreement. It allows the seller to disclose matters that might otherwise result in a warranty claim after completion.

Preparing accurate and comprehensive disclosures is an important part of reducing the seller’s future liability.

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

Buyers use warranties to obtain information and protection against undisclosed issues. We will negotiate the scope of the warranties and help limit your liability through appropriate disclosures, financial caps and time limits.

The timescale depends on the size and complexity of the business, the transaction structure, the buyer’s funding arrangements and the amount of due diligence required.

A straightforward transaction may complete within a few months, while a more complex sale can take longer. Good preparation, prompt responses and clear Heads of Terms can help keep the process moving.

Buyers are generally more confident where a business has clear financial records, dependable contracts, protected intellectual property, suitable employment documentation and no unresolved legal issues.

Reviewing these areas before approaching the market can reduce uncertainty, strengthen your negotiating position and make the business more attractive to potential buyers.

The position depends partly on whether the transaction is a share sale or an asset sale. In a share sale, employees usually remain employed by the same company. In an asset sale, 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 the allocation of employment liabilities.

The documents required will depend on the transaction, but they may include Heads of Terms, confidentiality agreements, a Share Purchase Agreement or Asset Purchase Agreement, a Disclosure Letter, board and shareholder approvals, restrictive covenants and completion documents.

Additional documents may also be required for property, employment, finance, intellectual property or transitional arrangements.

A business sale involves complex contracts, warranties, disclosures and potential liabilities that can continue after completion. A solicitor will help structure the transaction, prepare and negotiate the sale documents, manage due diligence and protect your position.

Our Corporate & Commercial team will also work with your accountants, tax advisers and other professionals to help the transaction progress efficiently and achieve your commercial objectives.