Business Sale Solicitors

When selling a company you are selling your shares in the company. The company will still own its assets and be subject to the same liabilities as before the sale. When selling a business, the buyer and seller must agree what assets and liabilities are to be transferred. Some liabilities and/or assets may remain with the seller after the sale.

The safest option is, of course, to receive payment in full on completion. Where only part of the purchase price is being paid upfront, there is a risk that the buyer will be unable (or will fail) to pay the balance. As business sale solicitors, we can advise on how to protect or secure any delayed payments, given the particular circumstances of your transaction.

It will save time and cost in the sale process if you ensure so far as possible that the company’s affairs are in order before a buyer’s due diligence exercise. We can provide a checklist for you, and ensure that the company’s commercial and employment contracts, statutory registers and Companies House records are compliant and up to date.

Warranties are statements given by the seller of a business or a company to the buyer, regarding the state of affairs of the business or company. A warranty is an important way in which a buyer can be sure of the value of what it is buying. For the seller, it is important to limit its liability by notifying the buyer of any issues before the sale.

An earn-out is a mechanism which entitling a seller to receive additional payments from the buyer following the sale, depending on the performance of the company post-sale. In this way, a seller can benefit from growth in the business after the sale, provided the specified targets are met.

When buying a company or a business it is important that you know what you are buying and any associated risks or liabilities or encumbrances. When carrying out legal due diligence we aim to flush out any potential problems or liabilities so that you can make an informed decision on whether to proceed, and at what price.

Heads of Terms are sometimes prepared at the initial stages of sale or purchase transactions, to summarise the principal terms agreed. This can be a useful tool to flush out any misunderstandings or points of disagreement at an early stage, which saves time in preparing the transaction documents, and therefore save costs further down the line.

When a company changes hands the company’s statutory registers will need to be updated, board resignations and appointments, changes to the persons with significant control, registered office and/or accounting reference date, must be filed at Companies House. New articles of association may also need to be adopted. We can help you get these things in order.