top of page

Business Purchases

Our Business Purchase Solicitors can:

  • Help you with negotiating Heads of Terms (HOTs);

  • Carry out Due Diligence;

  • Draft Contracts of Sales;

  • Advise on Lender documentation e.g commercial mortgages; and

  • Advise on related issues included commercial contracts, employment and property.







How we can help with your Business Purchase:

Pure Business Law has a specialist Commercial Solicitors who can deal with all types of commercial transactions.  Each case is important to us and our aim is to help you reach a commercially reasonably outcome. 



Our specialist commercial solicitors can provide ongoing support on your business journey. We can assist your business with a variety of contracts, compliance with company secretarial duties, directors disputes, intellectual property issues, shareholder agreements, investment agreements, director service contract, B2B and B2C terms and conditions of business, Employment law (including HR service) and other commercial matters.


Where there is a transfer/assignment/ grant of a lease/ purchase of a freehold property, we have specialist property solicitors that can deal with the transaction. Some of our specialist commercial solicitors are also specialist property lawyers. 

PBL PRACTICE POINT– if you do nothing else, speak to us early! Planning the transaction and dividing up responsibility will help ultimately and give better value. Sometimes that may not be possible, e.g. in the event of a sudden illness or unexpected death. Don’t worry, let us know—in those circumstances time can be of the essence.

What is a Business Purchase?

The first question is what are you buying? It will usually be a purchase of either:


(i) shares in the company that runs the business; or

(ii) the assets used in the business in conjunction with the goodwill of the business.

Business Purchase Process:


The purchase of shares involves four key steps:- 


.1. Negotiation of the Heads of Terms


It is essential that you have a reasonably detailed Heads of Terms (HOTs) This can avoid problems later. The HOTs are generally not legally binding but summarise what the parties have agreed. It is also vital at this stage to consider whether an NDA (Confidentiality Agreement) should be entered into by the parties to protect both parties’confidential business information during negotiations

2. Due Diligence


Due diligence is a term that is commonly used across various disciplines in the legal and corporate world. Simply defined, due diligence is “an investigation or an audit of a potential deal or investment opportunity”.


In the context of a business sale, due diligence is the process by which a Buyer or an investor in a company, asset or business (“the target”) investigates the records of the target to ascertain/confirm its stated value and to find out whether there are matters on which it requires additional information or which it should use as a lever to renegotiate the stated price.

PBL PRACTICE POINT – Preparation is key. Always involve your Accountants and your Solicitors and your Accountants before you sign the HOTs. They will be able to help you with preliminary advice on the HOTs and on what you can do to make the due diligence process smoother and quicker. There may be also be able to help you identify areas that may give rise to disputes later on in the transaction.  

3. Negotiation and Documentation


On the assumption that the Due Diligence process does not bring up any issues, the Buyer or his solicitors will the Contract for the purchase of the shares or assets. 

Share Purchase

An SPA is an agreement setting out the terms and conditions relating to the sale and purchase of shares in a company. This occurs when all shares in a company are purchased, and ownership of the whole business is transferred to the buyer. This means that the buyer would inherit all existing profits, responsibilities, and liabilities, including business risks. In short-form- when someone enters into a SPA, the buyer acquires all the shares and assets of that company.


The Share Purchase Agreement is the document that legally binds this transaction and ensures that the seller discloses their accounts, tax liabilities, contracts with third parties, etc., to allow the buyer to carry out Due Diligence checks on the company that they are purchasing. This is to ensure that the buyer is aware of all risks, burdens, liabilities, and assets of the company. It will deal with the price, and price variation mechanism (depending on net assets etc) and will also detail any restrictive covenants to be imposed on the sellers and warranties that the seller will be expected to give.


Asset Purchase 

An APA is the transfer of certain activities or assets related to a business and does not include the sale of the business as a whole. For example, an APA will facilitate the transfer of goodwill, machinery, stock, premises, creditors, debtors, know-how and intellectual property, i.e., the assets of the company.


With an APA, the buyer is able to choose which assets they wish to acquire from the company. It must also be ensured that each asset is transferred in accordance with the specific form of transfer required for that asset.


Further, it is also important to mention the transfer of contracts in a Share/Asset Purchase. All contracts that are related to the business should be transferred. Further, if the buyer wants to take on the current employees of the business, then they would have to ensure that the transfer complies with the Transfer of Undertakings (Protection of Employment) (TUPE).This is an essential element of transferring employees and can be a lengthy process but ultimately has been set in stone to protect employees from being made redundant/dismissed when a business (or part of a business) is sold.

The warranties are usually the main source of dispute and negotiation between the buyer and seller when the Contract is being negotiated. Warranties are promises by the Seller which, if they turn out to be incomplete, inaccurate or misleading, will give rise to a claim by the buyer against the seller. The warranties are necessary because the buyer is often buying the business without detailed knowledge of it. The seller may for example have taken out a loan 2 weeks before with a finance company but the legal charge has not yet been registered against the business. The seller can however avoid liability under the Warranties if the seller gives details of any liabilities or claims that are contrary to the Warranties that seller is giving. This information will be set out in a “Disclosure Letter”, which is a very important document. 

4. Completion


Depending on the size and complexity of the transaction, completion may take place on the phone between the parties solicitors. 

 Additional documents for Share Purchase


There will be a lot of associated documents for both the buyer and the seller regarding the Share Purchase. There should be records of board meetings held (eg those approving the sale/purchase), forms to be completed for Companies House (eg to change directors and registered office). There will also be changes to bank mandates and sometimes public announcements to be made etc. In a share purchase, the buyer will have to pay stamp duty on the share purchase (currently 0.5% of the share purchase price paid for the shares).


PBL PRACTICE POINT – It is essential that you take tax advice from your Accountant early in the transaction as you may be eligible for “Business Asset Disposal Relief" which would reduce the tax that you, the seller has to pay. Your Accountants will advise you on the tax relief requirements. For further information click here 

Specialist Business Purchase Solicitors


How can Pure Business Law help?


If you are are thinking of buying business or assets of a business , please contact us and book a consultation with one of our expert Business and Commercial Law Solicitors. We are specialist Business Purchase Solicitors based in Bedford and London and operate nationally.


Our highly experienced Business and Commercial solicitors can advise you on all business matters, including Share and Asset Purchases. 

bottom of page