Business transactions
Buying or selling a business: define the deal before the documents.
Make the structure, value, assets, liabilities, people and timetable visible from the start.
The transaction route
An asset purchase and a share purchase are not the same proposition.
A business can be acquired through selected assets and operations or, where a company is involved, through its shares. The structure affects what transfers, which liabilities remain, what consents are needed and how due diligence and warranties are approached.
The appropriate route depends on the entities, tax position, assets, employees, contracts, property and risk allocation. Legal, accounting, tax and funding advice should be coordinated rather than assumed to be interchangeable.
Structure and terms
Record what is actually being bought or sold.
A useful term sheet identifies the parties, structure, price mechanism, payment timing, included and excluded assets, conditions, target timetable and any period of exclusivity. Sellers should also identify what they need after completion, such as a release from guarantees or a clean operational handover.
Some preliminary provisions may be intended to bind the parties immediately. Confidentiality, exclusivity and costs wording should not be treated as decorative.
- Share sale, asset sale or another structure
- Price, adjustments, deferred payment or retention
- Property, contracts, intellectual property and data
- Employees, pensions, licences and third-party consent
Due diligence
Information changes both value and risk allocation.
A buyer may investigate ownership, accounts, tax, material contracts, disputes, property, employment, compliance, technology and intellectual property. The scope should reflect the target and the buyer's risk, not a generic checklist alone.
A seller can prepare by organising records, checking authority to disclose information and controlling access through an agreed process. Answers should be complete and consistent with the contractual disclosures.
Contract and completion
Warranties, indemnities and limitations allocate consequences.
The acquisition agreement may address price, conditions, warranties, specific indemnities, liability limits, restrictive covenants and completion deliverables. These provisions need to be understood against the due-diligence findings and disclosure process.
Completion planning should identify every signature, consent, payment, release and transfer needed. Post-completion work may include registrations, notices, integration steps and retention of transaction records.
Project team
Make responsibility explicit across advisers.
Legal advisers do not replace accountants, tax advisers, lenders, valuers or operational specialists. The client should know who owns each workstream, which assumptions have been made and how findings affect the decision to proceed.
A quote should state the assumed structure, deal value, expected negotiation, due-diligence scope and exclusions. Significant change to the deal may change the work and cost.
Preparation sequence
Prepare a useful business-sale enquiry
- 01
Name the parties
Identify the buyer, seller, target entity and decision-makers.
- 02
Describe the deal
State the proposed structure, value, funding and key commercial terms.
- 03
Map the assets
List property, contracts, people, IP, data, licences and major dependencies.
- 04
Explain the timetable
Set out conditions, approvals, funding dates and desired completion.
Questions to clarify
Common questions before the first conversation.
These answers are general orientation for England and Wales, not advice on a particular matter.
What is the difference between a share sale and an asset sale?
A share sale transfers ownership of the company, while an asset sale transfers agreed assets and operations. Liabilities, consents, tax and documentation can differ materially.
Why is due diligence needed?
It helps a buyer test what is being acquired and informs price, conditions, contractual protection and the decision to proceed. The appropriate scope depends on the target.
Are accountants and tax advisers separate from legal advisers?
Their work can overlap, but responsibility should be explicit. Do not assume legal scope includes financial, tax, valuation or investment advice.
Prepare the first conversation
Turn the business transaction into a concise, useful brief.
Collect the people, dates, documents and practical outcome before contacting a regulated legal provider. Do not include confidential information in this prototype.