Buying or Selling a Business Solicitors

Buying or Selling a Company or Business

At Eric Robinson Solicitors our expert team of solicitors can help you make the right decision about buying, selling or merging businesses by advising you on the processes involved and the issues to be aware of.

We will help you carry out due diligence, and having been established for nearly 60 years, we have a long track record of working closely with accountants to establish the the financial position of the business you are looking to buy or sell.

We are also experienced in advising on issues around employment law and licensing.

Do I need a solicitor to buy or sell a business?

It is always recommended to seek the support of a specialist business law solicitor when buying, selling, or merging a business, especially when dealing with business licences, contracts, leases and other financial aspects, or property matters. If you are taking on any employees as part of the business, it will be essential you fully understand what their contracts and rights are. Furthermore, having a business lawyer on your side who has assisted with the due diligence process will minimise the chances of disputes or claims in the future, and you will have put the steps in place to protect you and your business or investment.

Can you act for the seller and the purchaser of the business?

As a rule, this practice is not allowed as a conflict of interest could arise. The Solicitors Regulation Authority and the Law Society have strict rules for solicitors to follow surrounding this. Typically, the purchaser’s Solicitor will prepare the business purchase contract, and the seller’s Solicitor will review it, making appropriate amendments where necessary.

What documents do I need when buying a business?

If you are buying a business, part of the due diligence process will involve obtaining core details from the respective seller by way of a Due Diligence Questionnaire, which will likely include elements such as an overview of the company’s financial profile (e.g. profit and loss ledgers, debt information, plus all the accounts of any wholly owned subsidiaries). You must also receive all the relevant details on operational matters, including staffing information, management team structures and company procedures. There are also other documents you should consider, including a Confidentiality Agreement, Heads of Terms, Exclusivity Agreement, and an Acquisition Agreement which can be used to guide your purchase and ensure your financial and legal position is secure.

Seeking advice and support from a specialist business law solicitor will ensure any possible issues are identified early on and could save you a great deal of hassle and money in the long term.

If you are thinking about buying, selling, or merging a business, speak to Eric Robinson about how we can help. We can advise you on the processes involved and the issues to be aware of.

What is due diligence in a sale or acquisition of a business?

Due diligence is the process by which a comprehensive appraisal of the business is made before committing to the purchase. The main areas where due diligence is performed cover the Financial aspects (such as the accounts), Legal elements (such as making sure there are no outstanding legal issues or litigation matters pending), what employees the business has, that the seller legally owns the company, as well as Commercial aspects (which looks at areas such as the viability of the business, its competitors and any regulatory issues). Due diligence should be carried out by a specialist adviser such as a business law solicitor. We have a long track record of working closely with accountants to establish the financial position of the business you are looking to buy or sell.

If I buy the shares in another company, will stamp duty be payable?

Typically, yes. Stamp duty or stamp duty reserve tax (SDRT) is paid on all UK equity purchases at the prevailing rate at the time of dealing, unless a relief applies, such as a group relief or company reorganisation relief. However, Tax Law is highly complex, and you should seek specialist guidance on your regulatory obligations. Our lawyers can advise and represent individuals or businesses on stamp duty and share transactions.

Do all existing employees have to be transferred to the purchasing company?

Specific regulations govern what happens to employees when someone new takes over a business, which means that the business’ employees may be subject to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

TUPE applies to all employees when a business is transferred as a going concern, meaning employees automatically start working for the new owner under the same terms and conditions. There are also several statutory requirements to inform and consult affected employees in respect of the transfer, especially if you will be making any changes to employee numbers or reorganising staff. TUPE is a highly complex area of law. It is essential to fully understand your regulatory obligations to reduce the risk of an employment tribunal claim for unfair dismissal or unfair selection of redundancy.

Our specialist business law team and experienced employment lawyers can provide expert advice and guidance regarding the responsibilities if you buy, sell, or merge a business.

To speak to us and find out more, get in touch with one of our local branches at the following locations: Southampton, Hedge End, Chandlers Ford, Winchester, Lymington, or Richmond Upon Thames.