Browse our Buying and Selling a Business Services
Our corporate and commercial solicitors act on behalf of both individuals and companies in purchasing businesses or assets. Years of experience means that we understand the commercial realities and significance of these legal transactions. We work collaboratively with business owners and your accountants to deal with all the necessary requirements when buying a business.
Some of the issues that you will need to consider are the following:
Structuring and valuation
Is an asset purchase the appropriate way to deal with the sale of the business? Would it be worthwhile trying to sell the business as a share purchase using a hive down structure?
Pre-acquisition agreements
Should the buyer be required to sign a confidentiality agreement if it is to be provided with confidential information about the business? Should the buyer request an exclusivity agreement to allow it an exclusive period for negotiating its purchase?
Due diligence
Sellers need to prepare for due diligence and buyers needs to consider an appropriate level of due diligence. That may relate to legal, financial and accounting issues for the target business so that the buyer is aware of any issues affecting the business and the seller can ensure that it fully discloses any such issues to avoid any future claims.
The asset purchase agreement will cover many issues relating to the business including the consideration payable, which may be partially payable on completion and partially after completion. There may be conditions precedent within the agreement so that it is not affective until shareholder approval is obtained. It may define the assets to be acquired and will explain how debtors and creditors will be dealt with. There may be some contracts that are expressly assigned under the terms of the agreement. It may be worthwhile considering prohibiting the seller from using the same name as the business post completion.
The agreement is likely to contain a number of warranties. Occasionally, there may be limited warranties whereby the seller confirms its ownership of the business and the assets and its ability to enter into the documentation. Usually, there will be warranties relating to all aspects of the business including environmental matters, claims against the business, litigation etc. There are likely to be limits imposed on the warranties that restrict the buyer’s ability to claim against the seller.
If completion accounts are to be prepared post completion then the procedure for setting out and agreeing those accounts needs to be identified. The completion accounts may be used to adjust the purchase price.
Competition
Should the seller be excluded from competing against the business and, if so, for how long and will that competition be restricted to a geographical area?
Intellectual Property and Information Technology
How will the benefit of these assets be transferred with the business?
Employment
The transfer of the business is likely to be subject to TUPE provisions and the parties need to ensure that their agreement covers all TUPE related issues to avoid future employment claims.
There may be other issues dealt with by the parties, such as, pensions and real property. It may be necessary to transfer a property with the business or to grant a lease of the property occupied by the business.
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