Sale / Purchase of a Business
If you are looking to sell or purchase a company (or its assets) Walker Rose Solicitors is here to advise, draft and guide you through the process from start to finish.
From the outset of discussions it is paramount that those selling or buying a business (or its assets) seek legal advice. Be as honest as possible throughout the process, hire professionals and protect the integrity of your business.
Share or Asset Purchase? A share purchase is then the buyer inherits the company, warts and all. Every liability on that balance sheet will become the buyers. Whereas an asset sale the buyer can select the assets that they inherit – staff, equipment, property, database etc.
Due Diligence Process Due diligence uncovers some of the hidden aspects of the business, and poor consideration could cost you dearly. This is the stage in the selling process where the vendor will have to disclosure information and documentation about their business to under close scrutiny.
Full Disclosure - The potential buyer should seek a comprehensive list of documents and information form the seller the request for such information is normally sought by the solicitor representing the buyer, the request are set out in a Due Diligence Questionnaire.
Proactive sellers will already have a ‘seller’s pack’ prepared that can be issued to the buyer during early negotiations. This pack will assist the lawyers draft and agree firm Head of Terms – setting out the objectives of the sale/purchase. It can also save time and money further down the line. If a seller gives upfront honest disclose in the early stages when agreeing the purchase price, the buyer will have less grounds for seeking a reduction later in the process.
Legal, financial and commercial Due Diligence - There are generally three limbs of due diligence; legal, financial and commercial. A sensible buyer will not only look at the statutory accounts filed, they will want to look at forecasts, budgets, and monthly management accounts. As such seller should always ensure the financial as up-to-date and be in a position to confidently explain how the forecasts viable.
A seller will be asked for employee, client and supplier contracts, any shareholder agreements, asset registers etc. If sellers are able to prepare this documentation in advance of putting the business ‘up for sale’ the sale can proceed swiftly.
Non-Disclosure Agreements - It is important to ensure that the buyer does not divulge any sensitive information it obtains to anyone other than its professional advisors. It is perfectly acceptable for the seller to request the potential buyer enters into a confidentiality agreement / non-disclosure agreement. This will prohibit the prospective buyer from disclosing or using the information disclosed by the seller for any purpose other than undertake due diligence for the proposed purchase.
Another way to protect sensitive information is to only permit the buyer access to the seller’s management team or senior staff.
Avoid deal fatigue - Its always important to deal moving! Avoid ‘deal fatigue’ by instructing lawyers early, maintain communication at all times and consider having the purchase/sale pack referred to above prepared in advance of placing the business or assets up for sale.
A failure to action requests quickly or not responding to queries will result in a buyer abandoning the purchase.
Walker Rose Solicitor can assist with a share or asset sale and purchase of a business. We undertake the legal due diligence. We identify any legal risks affecting rights or obligations of the target (eg ownership of property, equipment or vehicles, employment disputes, ongoing litigation, intellectual property, and client contracts)
Walker Rose Solicitors provides astute legal advice and the drafting of legal agreements, polices and documents to address your immediate and on-going business needs.
We can assist, negotiate and draft agreement terms with the co-founders, investors, employees, suppliers and customers.
We can assist whether you are a new start-up or an established business. We work for you to design ‘best practice’ doctrines ensuring and securing a smooth running and efficient workplace.
Walker Rose Solicitors provide sensible commercial legal advice and draft the agreements you need in place to reduce areas of dispute or at least provide a mechanism for the parties to resolve a dispute. We can help you grow and evolve safe in the knowledge that you, your business and your brand are protected and stand on a strong legal ground to move forward.
Our advice is always Transparent, Pragmatic and Reliable.
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