A step-by-step guide
Are you Looking to Buy?
Buying a business is a significant step, and often a substantial investment.
Whether you’re expanding what you already run, moving into a new market, or backing a business you believe in, the outcome rests on the terms you agree and a clear understanding of what you’re taking on. Getting the legal side right from the start protects your money and keeps the deal on track.
How buying a business usually works
Every transaction is different, but most follow a route such as that set out below:
- 1
Deciding how you buy
A business is usually acquired in one of two ways: by buying the company’s shares, or by buying its assets. The structure affects your liabilities, your tax position and what happens to employees and contracts, so it pays dividends to settle this early, usually in conjunction with tax advice from your accountants.
- 2
Agreeing heads of terms
Once the main commercial points on price and structure are agreed in principle, they’re set out in heads of terms. This isn’t the binding contract, but it frames the deal and reduces the risk of disagreement at the eleventh hour.
- 3
Due diligence
Before you’re fully committed to the purchase, we investigate the business in detail: its finances, contracts, property, employees and anything else that bears on its value or carries risk. This is where issues sometimes come to light, and often where price and protections are renegotiated. Where you’re already comfortable with certain aspects of the business you’re buying, we can tailor the precise extent of the due diligence we carry out for you accordingly. We appreciate that no two deals are the same and each client’s needs are different, and we do not adopt a ‘one size fits all’ model to our work or our pricing.
- 4
The contract
The sale agreement records the deal in full. We negotiate the warranties and indemnities that hold the seller to account for the condition of the business, so you have some protection if something proves not to be as represented. We also ensure that your precise deal and payment structure is properly captured and you do not end up paying more than is necessary.
- 5
Completion
Ownership passes to you. We manage the legal mechanics and subsequent registration formalities so the handover is clean, and ensure all necessary protections are in place to protect the value of the business moving forward.
We keep our advice clear and commercially focused, so you always understand your position and the decisions in front of you, and we always tailor our suggested remit to your precise circumstances, deal value and overall risk profile. If you’re considering an acquisition, get in touch to discuss it in confidence. You can also read more on our Company and Business Sales & Purchases page.
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