Solicitor in Leicester for
Buying or Selling a Business
I’ve worked with Steven for a number of yeears. Unusually for a lawyer, he is very commercially minded, and can get to the nub of issues straight away. Would thoroughly recommend him.
0116 3667 900
Business Sales & Purchases
Business Sale Lawyer
Hello I’m Steven Mather, a Leicester solicitor who specialises in buying and selling businesses. So if you’re looking to sell your business or buy a business and need a business lawyer to help guide you through the legals, then I’d be delighted to get to know a little more about you. Do contact me.
Buying or selling a business, whether in Leicester or wider afield, is a big thing for many of my clients. If they’re sellers, they will have worked hard for many years, built up a business and they know their industry inside out. But they’ve never sold a business before. You’re a smart cookie, but need some help with the legal side of things. I can help. I understand that you need more than just excellent legal support; you need sound business advice as well, and I’ll provide that.
Why do you need a solicitor for a business sale/purchase?
Buying or selling a business, whether in Leicestershire or elsewhere, will usually come in the following stages.
- You’ve found the buyer/seller
- You’ve agreed in principle what the deal is (sometimes called Heads of Terms)
- You now want to make sure that what your buying or selling is exactly what you agreed, and that there are no nasty surprises once money changes hands (Due Diligence).
- Contract negotiations – ususally a share purchase agreement or asset purchase agreement, see below.
- Advice on warranties
- Actual transfer of share ownership or assets/contracts etc, aka completion.
The good news is that Steven Mather specialises in business sales and purchases – typically deals worth between £500k and £20m. Steven’s ideal client is not a mega-corporation, but a business owner who would really value and appreciate excellent legal advice, great service, personality and fixed fees. Is that you?
In the last 3 years, I’ve helped buy or sell:
- A £250k garden franchise
- A £1m Design company
- A £30k accountancy client book
- A £50k lettings agency client bank
- A £100k toy company
- A £250k Financial Services business
- A £160,000 franchised business.
- A £4m medical services company
- A £7m plant hire business
- A £3m lighting business
- A £260,000 gardening franchise
- £1.1 million sheet metal business
- A £41,000 escape room business
- A £800,000 agricultural business
- A £900,000 alarm business
- A £250,000 financial services business
- A £100,000 accountancy business
- A £1.2m instrumentation business
- A £1.4m haulage business
- Plus others
We help buy and sell businesses in Leicester and the East Midlands (although we do work nationwide throughout the UK). What you get with Steven is straight-talking, effective, excellent, professional advice. That level of service isn’t cheap, but if you want a great job doing and want to have direct contact with Steven rather than be passed down to a trainee, then you’ve found the right lawyer for your business.
If you’re buying an existing franchise (a franchise resale) see our dedicated page here.
- Share Purchase v Asset Purchase - The Differences
- What is Due Diligence?
- What are the key clauses in any business sale agreement?
There are two primary methods of buying or selling a business in the UK. Share Purchase or Asset Purchase.
Share Purchase / Sale
Where the company being purchased (usually referred to as the “target”) is a limited company, then it is likely that the sale will be of the whole share capital of that company.
A share sale is where the buyer buys all of the shares from the current shareholders. The buyer becomes the new shareholder(s) and thus takes control of the target company warts and all. Meaning that all customers, goodwill, debtors, employees, liabilities including things like bank finance and leases, remain in the target company. The target company continues exactly as it was prior to the sale.
Share sales are dealt with by a Share Purchase Agreement.
If you’re selling shares, what you’re typically looking for is a clean break from the business, to get your money as soon as possible and to have no ongoing liability. If you’re buying shares, then you’ll usually want to build in protections such as warranties, deferred consideration periods and by carrying out detailed due diligence.
Asset Purchase / Sale
In an asset purchase/sale, the buyer acquires selected assets and rights out of the target company – cherry picking what it wants – and usually leaving behind liability. Asset purchases are necessary if the target is not a limited company, and you’re buying a partnership or sole-trader business.
There will be an Asset Purchase Agreement which documents what assets are being transferred.
Due Diligence is the process by which a buyer of a company, asset or business investigates the records of the target to support its value and find out whether there are matters on which it requires further information or which it should use as a platform to renegotiate the price. It is, at a basic level, an information gathering process to allow the purchaser to understand the risks (if any) the target may be subject to. The due diligence process is supported by the giving of warranties and indemnities in the acquisition agreement.
There are commonly three types of due diligence:
- Commercial – this is carried out by the buyer to decide whether or not to acquire the target company;
- Financial – the buyer’s accountants should then carry out a financial investigation into the target company to make sure that the proposed price is accurate and reflects its true value; and
- Legal – after the buyer is satisfied on the first two points, then the buyer’s solicitors will raise various questions of the seller’s solicitors.
Legal Due Diligence usually includes the purchaser creating a long questionnaire for the seller to complete, extending to and covering a wide range of questions about the legal aspects of the company. These will include:
1. Corporate structure and records
2. Share capital and shareholders
4. Finance and banking
5. Contracts and trading
7. Intellectual property
9. Consents and compliance
10. Litigation and disputes
12. Retirement benefits
13. Real estate
15. Health and safety
Obviously, as mentioned above, the main difference to whether you’re looking at a Share Purchase Agreement (SPA) or an Asset Purchase Agreement (or Business Transfer Agreement) is whether the deal is a share sale or asset sale. However, the agreements will still be lengthy and likely to include some of the following types of clauses:
Parties – sets out who is a party to the agreement, with their full name and details.
Background – sometimes known as recitals, sets out the basic premise of the contract.
Definitions – the best agreements often have lots of defined terms, usually in capitals, which are then referred to throughout the contract.
Commencement – when the contract is due to start or its effective date (often when signing).
Conditions Precedent – things which need to happen before the sale can take place
Sale / Purchase – the clause which says the seller sells and the buyer buys
Purchase Price – how this is made up, when and how it will be paid
Assets – if an asset sale, a schedule of assets will usually be included
Completion – what must happen on completion
Warranties – a list of promises/statements by the seller to the buyer, which if incorrect result in a claim by the buyer or reduction of purchase price
Limitations on claims – often there will be a “de-minimis” level below which the buyer cannot bring any claims. There will usually be an overall limit too.
Property – whether there is freehold or leasehold property which forms part of the deal
Tax Covenant – on share sales, to set out what happens to tax liabilities or credits post completion
Restrictions on the Sellers – usually a buyer will want to stop the seller setting up in completion for a period of time
Confidentiality – whether the deal is confidential or an announcement to be made
Boilerplate clauses – a range of relatively standard form clauses which include matters such as the non-assignment of rights, force majeure, whether English law should apply and the jurisdiction of courts for any dispute, confidentiality provisions, termination, variation, waiver. These are called boilerplate standard clauses, but are still very important.
Schedules – often contain details referred to in the main agreement, which could be information or things like specifications.
Execution – the part where everyone signs.
How much will it all cost?
Steven works with fixed fees, and for each job a bespoke proposal is given.
We typically start at between 1-2% of the overall deal value in calculating a baseline for fees. However, sometimes that doesn’t quite work, particularly on deals below £250,000 – so we have a minimum fee of £2,500 plus vat for the smaller deals.
However, I’d much rather you give me a call on 0116 3667900 and have a chat about your requirements and how Steven Mather might help.
Incidentally, we rarely price match other solicitors – simply because the lower priced ones don’t provide the same level of service (or any!). However, we will usually be cheaper than ‘proper’ commercial firms (eg those with glass fronted offices, ones in Legal 500, ones that have a ‘coffee menu’… you know the ones).
Next Steps for your Business Sale/Purchase?
Whether you are buying or selling a business, doing as a share sale or an asset purchase, or you just don’t know – get in touch.
Steven’s typical client is probably like you – never sold a business before – and so we’ll help you every step of the way.
10 York Road
Suite 2 Salop House
13 Salop Road
Copyright 2021. Steven Mather Solicitor is a trademark and trading name of Kesters Nook Limited. Neither Steven Mather nor Kesters Nook Limited provide legal advice to the public. Kesters Nook Limited is a Consultant Practice of Nexa Law Limited, which is Authorised and Regulated by the Solicitors Regulation Authority.