Buying or selling a business can be a complex task. Having the right team working with you from the outset will make all the difference when it comes to getting fast, straightforward legal and professional advice, allowing you to remain focused on the business.
Whether you are buying or selling, timing and achieving maximum value are key to success. We can advise you every step of the way, from initial negotiations through to completion, identifying any possible issues and drafting and negotiating documents required to complete the transaction.
Every transaction is different so we take a creative approach to find the best solution to meet your needs; finding the best structure, communicating regularly with other professionals involved in the deal, whilst keeping a close eye on costs to make sure the transaction remains within budget.
You’ll also benefit from the expertise of our property and employment lawyers who have extensive experience of all the possible issues that can arise from a commercial transaction.
The key issue to consider is whether you will be buying or selling either the shares or assets.
If you are buying or selling an entire company (rather than part of a company, a partnership or sole trader) it will be an option for you to buy or sell the shares of the company.
The main advantage to you if you sell your shares, is that you will effectively (with some exceptions) cut all ties with the company going forwards. All of the existing liabilities, including any legal claims and outstanding debts, will be transferred with the company’s assets to the buyer. By selling your shares, you will also receive the purchase price directly.
If you are buying a company you will want to negotiate warranties and indemnities to make sure there are no hidden liabilities. If the seller is not honest, you will want to have sufficient protections in place to allow you to recover from the seller your expenses of dealing with any hidden costs.
An asset sale may be the only (and at times the most sensible) option if the business is not incorporated as a limited company or if only part of a business is being sold. It may also be required by the buyer if they are unwilling to take on the liabilities of the business.
If you are buying a business the advantage of an asset sale is that the seller takes the current liabilities with them unless you agree to take those liabilities on as part of buying the business.
If you are selling your business you will want to ensure that you are not left with any liabilities which will be impossible to satisfy once the business has been sold (such as the performance of the business’ contracts).
You will also need to be aware that if you sell assets owned by a company it is the company which will receive the purchase price rather than you as a shareholder. In such circumstances you may, if permitted, need to pay the purchase price to yourself and other shareholder at a later date by means of a dividend payment (or other form of distribution).