Whether you are buying or selling a business, the legal implications will be substantial. It is important that the contract is tailored to protect your interests and that you have a full understanding of the risks and liabilities.
The Corporate & Commercial team at CWJ has extensive experience in dealing with business sales and purchases in a range of sectors. We represent clients across the UK, ensuring that any transaction has the solid legal foundation needed for long-term success.
As well as genuine legal expertise, our Corporate & Commercial solicitors have a strong commercial understanding, meaning their advice will be pragmatic and will take into account your enterprise’s direction and goals.
Our expertise with business sales and acquisitions
Our Corporate & Commercial team regularly provide advice in respect of complex business transactions as well as for smaller organisations. Our depth of experience is rarely found outside of the city, and we combine this with outstanding personal service.
Based in Orpington, we work with clients in London and across the South East to provide tailored legal help and sound commercial thinking.
Our Corporate & Commercial team’s expertise has been independently recognised in the following ways:
- Ranked Band 1 for Corporate/M&A: SME/Owner-managed Businesses by Chambers & Partners
- Head of Corporate and Commercial Ben Madden is individually ranked Band 1 by Chambers & Partners while Senior Partner Andrew Wright is recognised as an Eminent Practitioner
- Ranked Tier 3 for Corporate & Commercial by the Legal 500
Our business sales and acquisitions solicitors can assist with…
Advice and representation across a range of transactions, including the following:
- Buying and selling shares of private limited companies
- Buying and selling business assets
- Negotiating and agreeing heads of terms
- Due diligence – investigation and reporting
- Advice on employment issues such as employment contracts, TUPE and redundancy
- Advice on the continuation of commercial contracts
- Drafting contract for sale and associated documents
Our legal fees for business sales and acquisitions advice
We know how important it is to have certainty when it comes to legal costs. Our pricing is clear and competitive, with our rates benchmarked against firms with comparable expertise in the sector.
We are able to act on a capped fee basis. We can also represent you by way of an hourly rate, giving you an estimate of the likely costs at the outset.
We offer flexible payment options so you can structure your payments in a way that fits your business requirements.
Find out more about our fees.
Business sales and acquisitions FAQs
What are the different ways of buying a business?
If you are thinking of buying an existing business, you can either buy some or all of its assets or buy the shares of a company. There are advantages and disadvantages to each, so it is important to be aware of the difference and understand which option is right for your situation.
An asset purchase involves buying only certain business assets, often coupled with taking on some liabilities, such as existing contracts. You would generally take on any existing lease of business premises, the benefit of commercial contracts, stock, machinery, intellectual property and the business’s goodwill.
The main advantage of this method of buying a business is that you can pick and choose which assets you want to buy, and you do not have to take on any liabilities unless specifically agreed.
With a share purchase, you will take on all of the company as a single entity, including its assets and liabilities. There is less of an option to control what you buy without a prior reorganisation; however, the transfer can be simpler as the only asset changing hands is the shares. This means that each individual asset or right does not need to be identified and addressed in the purchase agreement.
You will, however, need to ensure that the agreement contains sufficient protections in the form of warranties and indemnities, coupled with any pre-contract investigation.
What is the process for buying a business?
The first step is generally to agree on heads of terms. This is a non-binding agreement or letter of intent that sets out issues such as the purchase price, how the deal will be structured and some of the key terms, such as which assets will be included and what conditions the transaction may be subject to.
In buying a business, carrying out adequate due diligence is essential. This will involve examining aspects such as accounts, corporate documentation, existing contracts, intellectual property rights, employer information and existing liabilities.
The sale and purchase documentation will need to be negotiated at the time of sale, including agreeing on any warranties and indemnities. Warranties are a legal confirmation that information provided, such as company accounts, is correct. Indemnities are the seller’s agreement to cover identified existing or likely potential liabilities such as outstanding tax and legal disputes.
The buyer’s solicitor will also liaise with any funding lender involved, providing them with the information they need to go ahead to support the transaction.
Once the documents have been signed and funds transferred to complete the purchase, the buyer’s solicitor will carry out post-completion work, such as updating the records at Companies House, payment of any Stamp Duty and advising on notification given to employees.
What is the process for selling a business?
Preparation is important if you want to ensure a business sale goes through without unnecessary delays. Ensuring all of your accounts and legal documentation are in good order upfront should save a substantial amount of time and stress later on, covering the aspects that will be investigation in any due diligence process.
You will need to decide whether you want to sell the assets of your business or the shares if you operate via a company. A share sale allows you to transfer the liabilities of the business to the new owner along with the assets, which could be preferable.
It is useful to have an accurate valuation of the business to ensure that you understand whether offers you receive for the business are realistic. Once you have a buyer that you are happy to work with, you can agree on heads of terms with them.
The buyer’s legal and financial advisers will go through due diligence and are likely to raise a number of questions that will need to be answered.
The next step is normally for the buyer’s solicitor to draw up a sale agreement. Points that need to be negotiated in this for example include the extent of the warranties and indemnities and limitations on them, the extent of restrictions on the sellers once they have sold the business. There will also be a number of other documents to be prepared and signed, for example, share transfer forms, letters of resignation for directors and Companies House forms.
Once the buyer is happy to proceed, the documentation can be signed and funds paid over.
What do you need to think about when buying a business?
Investing in a business needs careful consideration and should seek the input of experts before you go ahead. As well as calculating the value of the business, buyers should also carefully research the market they will be operating in if it is not familiar.
You should try and find out why the business is being sold and verify that the information you have been provided is accurate.
If you can estimate how much it would cost to set up a similar business from scratch, this may help you decide whether you are happy with the price that is being asked. Comparing similar business sales should also inform you on this point.
You will also need to think carefully about the advantages and disadvantages of an asset purchase versus a share purchase.
Once you have decided that you want to proceed, you will need to start looking at the detail of the agreement and setting out what you want to be included in the heads of terms.
If you require finance, lenders should also be approached so that they can start requesting the documentation that they will need to make offers of finance.
Due diligence is crucial to ensure that you know exactly what you will be taking on. Generally, your accountant and solicitor will work with you to ensure that the business is financially and legally sound and that you are aware of risk areas.
Once you have a clear picture, your solicitor will be able to negotiate the agreements that will be needed to transfer ownership. This will mean including the warranties and indemnities that will protect your rights.
Can you start a competing business after selling your business?
If you sell your business, the purchaser is likely to want to make sure that you cannot simply set up another business in direct competition. They are therefore likely to request that the agreement for sale includes restrictive covenants preventing you from doing this.
The restrictions could include preventing you from approaching existing customers, clients, suppliers or employees for a specified period and setting up a business in competition within a particular geographical location for a specified period.