Company and Commercial solicitors

Buying or selling a business is a big decision and often involves a lot of money changing hands. To protect your interests and make sure everything runs smoothly, having expert legal support is crucial.

How Does Buying and Selling a Business Work?

There are two main ways to structure a business sale:

1. Asset Sale
   • In an asset sale, the buyer purchases specific assets and liabilities of the business.
   • This tends to benefit the buyer because they can choose which assets and liabilities they take on, reducing risk. The seller may be left with some liabilities, though available tax reliefs can help soften the impact. The result is that the business may need restructuring as it won’t continue “as-is.”
2. Share Sale
   • In a share sale, the buyer acquires the company’s shares, which include all assets and liabilities. This is simpler for the seller and allows the business to carry on as usual. The issue for the buyer in this scenario is that they take on greater risks by inheriting the company’s liabilities.

What Does a Solicitor Do in a Business Sale?

For the Seller

A commercial solicitor plays a vital role by:

• Due diligence: Examining the buyer’s background to flag potential legal issues.
• Legal advice: Covering areas like non-disclosure agreements and employment rights.
• Contract drafting: Preparing clear agreements to prevent future disputes.

For the Buyer

A solicitor ensures the transaction goes smoothly by carrying out:

• Due diligence: Checking the business’s records for risks.
• Negotiations: Working with the seller’s solicitors to protect the buyer’s financial interests.
• Managing fund transfers: Overseeing the secure transfer of money.

Documents You’ll Need

To Sell a Business

The business seller will need to gather these key documents for potential buyers:

• Shareholder information
• Supplier contracts and agreements
• Tax returns
• Property lease details
• Employee contracts

For the Sale Process

When the sale progresses, these documents will come into play for both parties to agree to and sign:

• Heads of Agreement: A draft of the sale terms, including price and completion date (not legally binding).
• Confidentiality Agreement: Protects sensitive business information and reputations.
• Business Sale Agreement: The legally binding document outlining the sale’s details, including price, what is included, and the completion date.

How Can Fitzhugh Gates Solicitors Help?

At Fitzhugh Gates Solicitors, we understand how high the stakes are when buying or selling a business. With significant capital involved and employees’ livelihoods on the line, the process needs to be seamless.

Our expert commercial solicitors bring years of experience to the table, ensuring everything is managed efficiently and effectively. We’ll guide you through the process so you can focus on what’s most important.

Ready to talk? Connect with us today and see how Fitzhugh Gates can support you.