Solicitor for Buying or Selling a Business
Legal services for business sales and purchases
Deciding to buy or sell a business is a major decision. A business is a combination of years of hard work.
There are lots of elements that make a business. Equipment, machinery, branding, employees. All of these factors, and more, make up what a business is. Preparing your business for sale for potential buyers, or making the decision to purchase a business, can be a complex and time-consuming task.
A specialist commercial solicitor will ensure that your business interests are protected. They will make sure the transaction is completed not only accurately, but also in a timely manner.
On this page:
What are the options for buying a business?
When looking to buy a business, there are two options available to you. These are share purchases or asset purchases.
Both options achieve the same goal of you buying the business. The difference between the two buying options is around key legal and tax variations.
Your solicitor will be able to offer advice on both options if you are unsure which option is best for you.
What are the options for selling a business?
For buying or selling a business, there are usually two options available to you. These are:
- Asset Sale
- Share Sale
Both options have the same end goal of the sale of a business. The difference lies in various tax and legal processes.
Asset Purchase or Sale
During an asset purchase or sale, the transaction will involve transferring ownership of all the assets that are required to run the target business. This can include assets such as;
- The commercial property
- Any equipment and machinery
- Branding and Intellectual Properties
- Business Records and Contacts
- Stocks, Inventory and IT Systems
With an asset purchase or sale, it is common that liabilities and debts related to the business remain with the original owner.
The purchase price will usually be based on the value of all the assets needed to run the business.
Share Purchase or Sale
During a share purchase or sale, the target business is transferred through the sale of shares in the company.
As a result of this, the person buying the shares effectively takes ownership of all the assets required to run the business.
Because share purchases or sales relate to the purchase of company shares, this means the business being bought needs to be a limited company registered in England and Wales. As a result of it being a registered company, all assets and liabilities remain with the company during the sale.
This can mean that the original owner is not responsible for any of the debts of the business and these will transfer to the new owners.
Which option is right for me?
Deciding which option is right for you will depend on a few factors. For example, if your business is operated as a sole trader, then you will not be able to use a Share Sale as a selling option.
On the other hand, if the business is a limited company, you may have both options available for you.
Usually, the method of sale will depend on which party, the buyer or seller, has the greater bargaining power. If you have weaker bargaining power you may not have much choice in the sale method. But if you have better bargaining power you may have the opportunity to decide with sale method suits you best.
If you are looking to buy or sell a business, for independent legal advice please contact our Commercial Team today.
What is the typical process when buying or selling a business?
Regardless of the type of business and what industry or sector it is in, the process usually follows the same process. This is:
- The parties involved will often negotiate the basic terms of the deal which is sometimes set out in writing using “Heads of Agreement”;
- We will work with you to consider and plan for the future and carry out enquiries and searches where applicable;
- The seller will often require a non-disclosure agreement/confidentiality undertaking;
- The buyer will carry out Due Diligence to obtain various information relating to the company being purchased; if we are acting for the buyer, we can help to prepare a detailed list of questions to send to the seller’s solicitor and keep a detailed record of the answers and documents received;
- The buyer’s solicitor will usually prepare a draft of the business purchase agreement which will be sent to the seller’s solicitor for their review. This may undergo several revisions as the negotiation progresses;
- A Disclosure Letter is drafted by the seller and negotiated between the seller and the buyer. This aims to bring any potential problems to the buyer’s attention by stating any matters that the seller knows of.
Why use Rotheras Solicitors for buying or selling a business?
You get to work with a firm that has extensive experience. Over the years, our team have helped in the purchase or sale of businesses in a variety of industries and sectors.
Simple language that you can understand. You will get assistance from our legal team whilst carrying out due diligence.
Confused by some legal technicalities? Then our solicitors will explain everything in a simple way so you have a complete understanding of what you are buying. From business assets to liabilities.
When it comes to drafting and negotiating the business purchase and sale agreement, your solicitor will be there to help ensure your best interests are kept.
With you from the very start. We can help you deal with the buyer’s or sellers enquiries to ensure you are thoroughly protected. This includes advising you on how much information to provide any prospective buyers or sellers to protect yourself from potential commercial damage.
Need independent advice from another specialist? We have long-standing relationships with many trusted accountants and independent financial advisers. These specialists can independently offer their advice on what type of purchase is in your best interest.
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Chambers UK, 2018
Anton Balkitis frequently represents the operators of both goods and passenger vehicles in court proceedings. Clients remark: "He has a commercial understanding of real-life issues and will always provide a balanced view
Chambers UK, 2019
Impressive group with expertise in both matrimonial finance cases and children matters. A strong childcare team handles cases involving physical and emotional abuse, as well as fatalities. Well versed in matters with international aspects, Hague Convention cases, as well as adoption and guardianship issues.
Chambers UK, 2018
Chris Powell at Rotheras was recommended to us by a trusted associate within the Transport Industry; without doubt we wouldn’t have had the excellent outcome we did without his and his team’s involvement. The level of professionalism, expert advice and assistance was faultless; we felt reassured and well informed throughout the whole process. It was a pleasure to do business with him and would highly recommend his services!
Julian Brindley - John Brindley Ltd
The team at Rotheras, and Mr Powell in particular, have provided us with an outstanding service. We are extremely grateful for the help and support they gave us in dealing with issues relating to our transport operations and our goods vehicle operators licence. Mr Powell was professional, knowledgable, efficient and effective. He quickly understood our business and the problem we had. He responded with sensible advice and acted quickly on our behalf to resolve the matter. I cannot thank him enough for his help and I would recommend Mr Powell, and the Rotheras team, without hesitation. I am extremely grateful for the help they gave us.
Richard Hitchcock - Hitchcock & King
I would highly recommend James Briggs, solicitor at Rotheras. He has been extremely helpful, patient and thorough whilst helping me with affairs following the death of my husband. Even during lockdown (covid) he maintained communication and kept me informed of what was happening. He successfully achieved the outcome I needed and I would not hesitate to recommend him.
We are in the middle of launching our own packaging agency and contacted Rotheras for some professional legal advice with regards to contracts. After an initial call with Billy, he made it clear what we needed and asked plenty of questions to understand what it was we needed. He was very responsive to our questions, whether it be over the phone or via emails and made the process really simple. We had little experience in this area so it was fantastic to work with Billy, who explained everything concisely. We were also really pleased with the quick turnaround and great value offered. Would thoroughly recommend working with Rotheras.
Tom Burden, Director of Rightbox Ltd
Billy understood our requirement from the get go and really nailed down on what we needed in our commercial agency agreement. Billy kept us informed every step of the way and showed great professionalism. We would recommend his services to any start-up business who is in need of legal advice and guidance with commercial contracts.
Axl Barber, Sales Director of Rightbox Ltd
I was extremely pleased with the service that Kerry provided in order to sell my mothers house. Good, prompt communication and all questions dealt with or answered as requested. Consequently I would recommend yours services to others.
Anton has substantial experience acting for commercial goods hauliers and other transport operators. He advises on a range of contentious issues including operator licence, maintenance and tachograph matters, with a wealth of experience acting in public inquiries before Traffic Commissioners."Anton is a highly informed and personable lawyer.
Chambers UK, 2020
Chris Powell focuses his practice on road transport issues, regularly representing haulage, transport and logistics companies. He has considerable experience in regulatory matters involving operator licences and compliance failings, as well as more serious criminal investigations relating to fraud.
Chambers UK, 2020
Dear Sally, I can’t thank you enough for today! You took the pressure off me and I felt so looked after and understood everything that was happening. Thank you so much!
Billy advises businesses on a range of commercial and corporate issues and is happy to assist you with buying or selling businesses, corporate mergers and shareholder agreements
Lauren Kilbride is a Trainee Solicitor within Rotheras’ Corporate & Commercial department and is based at the firm’s Lace Market office.
Sandeesh Samra is a Senior Paralegal in our Corporate and Commercial team and is based at our Lace Market office in the heart of Nottingham city centre.
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Posted on 04/05/2022