Business Purchase Solicitors & Legal Advice for Selling a Business

Our Business Sale Solicitors are experts in the management of business transfers in the UK.

Whether a seller or a buyer it is important that you are aware of your potential future liabilities and obligations which may not initially be apparent to you. In particular this helps to ensure that you do not leave yourself exposed to any unnecessary risk.

At Rowlinsons we understand this better than anyone. That’s why we have a dedicated team who understand all aspects of the transaction including the property element which is often the main asset of the business.

So whether you are buying or selling, we will avoid the legal jargon and guide you through the legal process.

Contact us on 01928 617 050 for an initial no obligation call or click here for a call back.

How do I buy a business?

There are many advantages to buying an existing business in the UK. While it is important to carry out proper research to avoid buying into an unfavourable deal, businesses that are already trading can provide security, as they have a history of profitability, existing relationships with clients and suppliers, and often a working team of employees. Depending on the size and industry of the business you are interested in, our Business Purchase Solicitors will advise you on your unique process. However, the main steps to buying a business in the UK are:

Identify the business

Depending on your motivations to purchase a business, you may consider options in a specific industry, size, or location. The business you buy should be a good match for your skills and ambitions, and you should consider how much money you are prepared to spend or need to earn to make the transaction viable.

Get a business valuation

A thorough valuation of the business you are looking to purchase will be the foundation of the process. Some buyers decide to complete a valuation themselves, however we advise to seek the support of an external financial professional.

The history, financial position, and legal processes related to the company will all play a part, as will the value of the assets – both physical and intangible, like IPs and industry reputation.

Negotiate with the seller

Based on the valuation of the business and the knowledge you have acquired about its corporate structure, you may begin negotiation by offering an amount of money for the business. This may be accompanied by additional terms, such as the handling of tax, assets, and shares.

Negotiations can take time and be complicated. It is vital to have the support of specialist Business Purchase Solicitors to ensure you reach an outcome you are satisfied with, and that protects your business interests.

Complete due diligence

Following the negotiations of price and terms of purchase, you can begin the process known as due diligence. This allows you to get a clear picture of the current state of the business from all aspects, as well as having a realistic prediction of future performance. This process is generally divided in:

• Financial due diligence: this will uncover any financial liabilities or issues.
• Commercial due diligence: this includes an analysis of the market and competitors.
• Legal due diligence: our Business Purchase Solicitors will help you uncover any legal issues, such as disputes or regulatory issues, and ensure the purchase proceeds smoothly.

Finalise the business purchase

After your offer has been accepted and due diligence is complete, you can proceed with the finalisation of the transaction by transferring ownership, leases, and contracts. You can often transfer the VAT registration if required by the business.

Once you have acquired the business, the existing employees will generally be contracted under your new ownership. As part of the transfer, new business owners often decide to make changes to staff, and reduce the company’s headcount once they take over. This must be done very carefully and under expert legal guidance. Our Business Purchase Solicitors will help you avoid employment tribunal claims or claims for unfair dismissal.

How do I sell my business?

If you have decided to sell a business, it is vital to understand the process to ensure your interests are protected, and you get the full value of the business and assets. Our Business Sale Solicitors will tailor the process to the exact circumstances of the business, its value, and its structure. In our experience, the general outline of the sale of a business is as follows.

Identify your objective

Each business sale is unique, and will have specific aims. You may be looking to exit the business because of internal disputes, economic downturns, or to start a new business with some of the capital.

The reason you are selling the business may also inform the price or time frame you are looking to achieve. This should be considered throughout the sale process.

Prepare the business

During the sale process, prospective buyers will go through what is known as “due diligence”. This means they will inspect the business by analysing financial records, management and corporate structure, liabilities, and property and assets. By ensuring everything is ready to be presented, you will be more likely to get a better deal. Some of the steps you can take to prepare the business for sale are:

• Prepare updated financial records
• Reduce business expenses
• Make sure the assets and properties are in good shape
• Consolidate management structure and settle disputes
• Obtain financial and legal advice in preparation for a deal

Value the business

The value of your business should be made on the basis of its profits, expenses, reputation and many more aspects. You may also need to enter negotiations at a later stage, so your valuation will need to be based on clear facts about the business.

It can be complicated to define a number at this stage, especially if you have owned and ran the business for a long time. This is why it is crucial to get the support of Business Sale Solicitors with years of experience helping owners during transactions. We can help you get a business valuation that will be the starting point of a strong negotiation process with prospective buyers.

Calculate tax implications

You are likely going to need to pay Capital Gains Tax if you sell your business for a profit. There are, however, a number of options to relieve the cost of tax when you finalise a sale, especially if you reinvest the funds in a new business or trade ownership for its value in shares from the new owners.

If you are not sure about which taxes or relief schemes apply to you and your business, contact our Business Sale Solicitors today for expert guidance.

Connect with a buyer

Finding prospective buyers for your business can be challenging, but there are many services and platforms you can use to find the perfect match. Many owners find luck on online platforms, contacting a supplier or competitor, or using a broker.

Similarly to selling a property, you may build a brochure or presentation about the business to send to prospects, outlining its main selling points and defining the current position.

Negotiate with the buyer

Once you find a buyer, it is important to negotiate with them. This is not only about the monetary value of the business, but about defining the terms of the deal, such as the ownership of Intellectual Property (IP) or how tax implications will be handled in the transaction.

Your business valuation should allow for some room in the total price, however avoiding the undervaluation of your business in order to close a deal is vital.

Complete the sale

After agreeing on the terms of the sale, including the total price, these will be compiled into the purchase and sale agreements, and a bill of sale will be produced. Other documents, such as lender documents relating to loans or lease agreements for premises or equipment, may be included. It is common to add a non-compete agreement to keep you from starting a new business in the same space and industry.

When the sale is finalised, you may inform the employees of the situation and how it will affect them directly. You will also need to update HMRC or Companies House in some cases, and ensure all the legal processes needed have been taken care of.

As you may be liable for tax payments, we advise clients to finalise the sale and avoid large expenses until the tax implications are clear and have been settled.