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Legal costs can vary significantly for sales and purchases of businesses. There are a lot of factors, which can include: The amount of the purchase price and the structure of the payment profile. Contracts are about certainty. Deals with purchase price adjustments (i.e. cash free, debt free) or earn-outs will likely cost more to document those terms; including what happens if the parties cannot agree and how the business should be carried out in the interim period. The size a

As a solicitor who specialise in sales of businesses, I aim to guide sellers through the sale process. Sellers may receive a comprehensive legal due diligence questionnaire asking detailed and specific questions about areas of the business. These questions can be complicated for someone going through the process for the first time. However, legal due diligence does not need to be overwhelming. I will explain what the questions mean, let you know what information the buyer is

One of the biggest problems that can arise in a sale of a company is an historic buyback of shares not being carried out correctly. Not complying with strict company law requirements can cause a share buyback to be void and those shares to remain held legally by that individual. One common mistake is the purchase price being paid in instalments incorrectly. Problems with a buyback need to be carefully evaluated and it considered how (if possible) it can be rectified. This can

I often get involved in share-for-share exchanges. This can be a standalone transaction, part of exit planning or part of wider group restructuring. What is a Share-for-share Exchange? This is where shareholders exchange shares in an existing company for shares in a holding company. This may involve the following: Step 1 : Apply for tax clearance. I would recommend that you speak to your accountant/tax adviser for advice on the tax implications. Step 2 : Incorporate the new h

It is important to get sale ready. Some business owners only start thinking about the legal side of a sale once they’ve found a buyer. However, this can leave a seller with a lot of work to be undertaken in a short period of time. Getting Your Affairs In Order Sensible planning and getting your affairs in order in good time should mean that the transaction completes quicker and in line with your target completion date. It can reduce the time spent during the deal compiling in

There are many different ways to a sell a business. This could be selling to: A third party, a competitor or to private equity The existing management (known as a management buyout or a "MBO") An Employee Ownership Trust ("EOT") Family Investment Company ("FIC") Once a strategy has been identified, it would be prudent to take both legal and financial advice before agreeing the headline terms with any buyer. Renegotiating the deal structure or key terms later may prove very di

In a business purchase, legal due diligence is a process of the buyer obtaining and reviewing information about the business and its liabilities and obligations. The buyer can then make informed decisions about whether and how to proceed with the deal. A buyer may want to consider: The Company's Corporate Records Is it buying the proportion of the business it has negotiated and is paying for? Are there any unexpected co-owners? How do any agreements with co-shareholders or op

A business can be acquired either through the purchaser buying the shares in the company or its assets. With a share purchase the company remains intact – it is only its ownership that changes. With an asset purchase, however, the assets of the business change hands and can move to a new company set up by the buyer. Buyer and sellers should make sure they understand the differences in the structures. Reasons why a share purchase deal may be preferred: It may provide favourabl