Hassle-free help from the UK's best Corporate solicitors.
Transparent pricing, from start to finishGet the support you need, when you need itTrusted lawyers, clear expectations
Transparent pricing, from start to finishGet the support you need, when you need itTrusted lawyers, clear expectations
Amazing experience
After placing an enquiry, I received a call 20 minutes later, and then 2 hours later, I had a solicitor assigned to me. They were absolutely incredible right from the word go - amazing and very prompt with replies, answering all my questions and keeping the process moving. We finally completed today and I am so unbelievably happy. I wouldn’t hesitate to use Lawhive again in the future if needed.
Lily
First class service
I initially made an online enquiry about a tricky conveyancing matter and received an immediate call back. They understood straight away what was needed and gave me a quote that was very reasonable. It was such a pleasure to find someone who was cheerful, professional and completely reassuring as I’d been getting quite anxious about the sale of my house. The service Lawhive has provided is absolutely first class and I cannot recommend them enough.
Charles
Empathetic, professional and efficient
I am an executor, selling my mother's home. I found the assistance I received from Lawhive first rate - empathetic, professional and efficient.
Mark
Great service from Lawhive
We used Lawhive for our conveyancing needs and our solicitor was very helpful, patient and informative. She helped us with our needs with prompt responses and provided a very efficient service.
Kelvin
Great service when you need clarity and calm
Our solicitor was warm, friendly and provided crystal clear communication. A lot of conveyancers assume customers know everything about the process already, so it was really appreciated to hear each stage included in the price given.
Em
Quick and efficient
We used Lawhive for a transfer of property and conveyancing. Our solicitor was so helpful and thorough with the whole process. He responded quickly and efficiently to any questions or requests that we had and explained some of the more complicated issues regarding the process clearly.
Geri
Fantastic service and experience with Lawhive
I had the pleasure of working with Lawhive doing a transfer of equity on a property. Our solicitor’s service was amazing, she responded quickly to any questions or concerns and kept me updated throughout the process. I can strongly recommend her for any conveyancing work that you may need. Fantastic service all round.
Jane
Amazing experience
After placing an enquiry, I received a call 20 minutes later, and then 2 hours later, I had a solicitor assigned to me. They were absolutely incredible right from the word go - amazing and very prompt with replies, answering all my questions and keeping the process moving. We finally completed today and I am so unbelievably happy. I wouldn’t hesitate to use Lawhive again in the future if needed.
Lily
First class service
I initially made an online enquiry about a tricky conveyancing matter and received an immediate call back. They understood straight away what was needed and gave me a quote that was very reasonable. It was such a pleasure to find someone who was cheerful, professional and completely reassuring as I’d been getting quite anxious about the sale of my house. The service Lawhive has provided is absolutely first class and I cannot recommend them enough.
Charles
Empathetic, professional and efficient
I am an executor, selling my mother's home. I found the assistance I received from Lawhive first rate - empathetic, professional and efficient.
Mark
Great service from Lawhive
We used Lawhive for our conveyancing needs and our solicitor was very helpful, patient and informative. She helped us with our needs with prompt responses and provided a very efficient service.
Kelvin
Great service when you need clarity and calm
Our solicitor was warm, friendly and provided crystal clear communication. A lot of conveyancers assume customers know everything about the process already, so it was really appreciated to hear each stage included in the price given.
Em
Quick and efficient
We used Lawhive for a transfer of property and conveyancing. Our solicitor was so helpful and thorough with the whole process. He responded quickly and efficiently to any questions or requests that we had and explained some of the more complicated issues regarding the process clearly.
Geri
Fantastic service and experience with Lawhive
I had the pleasure of working with Lawhive doing a transfer of equity on a property. Our solicitor’s service was amazing, she responded quickly to any questions or concerns and kept me updated throughout the process. I can strongly recommend her for any conveyancing work that you may need. Fantastic service all round.
Jane
It shouldn’t take a law degree to find the right legal service for you. With Lawhive, you can get legal help in just a couple of steps.
Answer a few questions on our site and instantly speak to a member of our team for a quote or request a callback at a time you choose.
We’re always open about our fees, so you’ll never pay more than you’re expecting.
Our lawyers are carefully selected for their expertise and experience, so you’re always in safe hands.
01 overview
Selling a business is a significant undertaking that requires careful planning, expert negotiation, and thorough legal oversight. Whether you're planning to retire, start a new venture, or just cash in on your hard-earned success, having a trusted solicitor by your side can make all the difference in ensuring a smooth and profitable transaction.
A solicitor with expertise in business sales can guide you through the entire process, from initial valuation to finalising the sale, bringing to the table a wealth of experience in handling the legal and financial complexities involved.
Selling a business involves lots of legal documentation and potential liabilities.
A solicitor helps identify and mitigate these risks, ensuring that all legal aspects are covered, and your interests are protected.
If you're looking to get the most buck for your business, a solicitor can negotiate terms on your behalf and structure the deal to your advantage.
They can also make sure all of your contractual obligations regarding the sale of a business are fair and clear.
At Lawhive, our network of corporate solicitors is dedicated to helping you sell your business with confidence and ease. We offer personalised, affordable legal support tailored to your needs to facilitate a seamless and successful transaction, including:
Contact us today for a free case evaluation and quote for the services of a specialist lawyer to assist you in every step of the sale of your business.
To sell a business in England and Wales for whatever reason you are deciding to do so, you need to:
As you can imagine, selling a business is not as simple as it looks, so having a solicitor on board throughout the process can support you, and make sure everything is legal and correct.
There are different ways of valuing a business. These include:
To determine the value of your business, start by evaluating its:
Look at your financial statements, including profit and loss accounts, balance sheets, and cash flow statements.
These documents should provide a clear picture of your business's profitability and financial health.
In evaluating your assets, make sure to consider both tangible and intangible assets like property, equipment, intellectual property, and brand reputation.
Assessing your liabilities will also help you understand the net value of your business.
Look at recent sales of similar businesses in your industry to gauge market trends and valuation multiples.
This can help you understand where your business stands in the current market.
The valuation of your business is a key part of the selling process. As such, it's a smart idea to consult with a professional business valuator or financial advisor to get an accurate and detailed valuation.
When selling a business, you need to prepare a clear set of documents for a smooth transaction and to provide potential buyers with all the information they need.
This includes:
| Documents needed | |
| Financial Statements | Including profit and loss accounts, balance sheets, and cash flow statements for at least the past three years. |
| Tax Returns | Copies of your business tax returns for the past three years. |
| Legal Documents | Your business’s incorporation documents, operating agreements, partnership agreements, and any amendments. |
| Contracts and Leases | All current contracts and agreements, such as leases, vendor contracts, customer contracts, and employment agreements. |
| Asset List | Includes real estate, equipment, inventory, intellectual property, and any other valuable assets. |
| Employee Information | Including roles, salaries, and employment contracts . |
As well as these, you should prepare confidentiality agreements with the buyer to protect sensitive business information and prepare due diligence documents.
When selling a business, you can choose to sell either its assets or its shares. Each method has different legal, financial, and tax implications.
Selling assets involves transferring ownership of individual business assets to the buyer, including equipment, inventory, intellectual property, contracts, and goodwill.
This method is often simpler for buyers as they don't generally assume the company's liabilities as part of this type of sale of a business.
Selling shares involves transferring ownership of the business entity itself. This means the buyer takes over the company with all its assets and liabilities.
This way of selling a business can make the transition smoother for ongoing operations as there is continuity of contracts and employees. However, more extensive due diligence is typically required for the buyer particularly to understand the full scope of liabilities and obligations they'll be taking on.
Selling a business can take anywhere between 6 months to over a year in some cases.
In general, each stage of the business sale process is anticipated to take the following length of time:
When selling a business, you should make sure that all financial records are up-to-date. Buyers will likely conduct thorough due diligence as part of the sale, including reviewing financial records, contracts, employment agreements, and any pending legal matters.
As we've mentioned previously, you'll also need to get a professional business valuation to determine the fair market value of your business.
Before a business can be sold, all owners must agree to the sale. This may involve getting consent from shareholders or partners.
You should also draft a comprehensive sales agreement outlining the terms and conditions of the sale including the purchase price, payment terms, liabilities, warranties, and any covenants.
Depending on your industry, you may need regulatory approvals or licenses to transfer the business to the new owner.
You'll also need to comply with employment laws regarding the transfer of employees. This may involve informing employees, transferring employment contracts, and ensuring continuity of employment rights.
The sale of the business should also not violate any competition laws. This means, in some cases, you may need to notify or seek approval from competition authorities.
You may need to pay Capital Gains Tax on the profit from the sale of the business and determine if the sale is subject to VAT. Although, in some cases, the sale of a business as a going concern may be exempt.
If selling shares, stamp duty may also be applicable. It is important to understand and comply with these tax requirements.
To ensure confidentiality during the sale process, start by using non-disclosure agreements with all potential buyers and any third parties involved.
These agreements legally bind them to keep all shared information confidential.
Additionally, limit the amount of sensitive information you share initially. You should provide detailed financials and other critical documents only to serious buyers who have signed an NDA.
To support this, you can use a business broker or intermediary to handle inquiries and vet potential buyers, which helps maintain anonymity and control over who gets access to information.
The due diligence phase is an important part of selling a business. This is where a prospective buyer looks at various aspects of your business to assess its value, risks, and potential.
This involves the prospective buyer:
The due diligence phase is comprehensive, as you can see, and can feel intrusive, but the buyer needs to assess the viability and value of your business.
Being well-prepared and transparent through the sale of a business can facilitate a smoother transaction process and build trust with a prospective buyer.
When you sell your business, the profit you make (the difference between the selling price and the purchase price) is considered a capital gain and is subject to Capital Gains Tax.
In the UK, the CGT rate can vary depending on whether you qualify for Business Asset Disposal Relief (previously known as Entrepreneurs' Relief), which can reduce the CGT rate to 10% on gains up to a lifetime limit.
If you qualify for Business Asset Disposal Relief, you can pay a reduced CGT rate of 10% on gains up to £1 million over your lifetime. To qualify, you must meet certain criteria, such as owning the business for at least two years.
And, depending on the structure of the sale, part of the proceeds may be taxed as income. For example, if you sell shares in your company and receive payments over time (installment sales), these payments might be subject to income tax.
In certain cases, the sale of a business may involve VAT. If you sell the business as a going concern (where the business continues to operate under new ownership), the sale might be exempt from VAT.
Given the complexity of tax laws, it's advisable to consult with a tax advisor or accountant who can provide tailored advice based on your specific circumstances. They can help structure the sale to minimise tax liabilities and ensure you meet your tax regulations.
Initially, the buyer and seller agree on the terms of the sale, which are detailed in a letter of intent or heads of terms.
This document outlines the key points of the sale, such as the purchase price and payment terms.
The buyer then conducts due diligence and when this is completed, a formal sale agreement is drafted. Both parties review and negotiate the agreement to make sure it accurately reflects the agreed terms.
On the closing date, both parties sign the sale agreement, and the buyer pays the agreed purchase price.
The transfer of ownership typically involves transferring the business's assets, such as inventory, equipment, and intellectual property, to the buyer. Additionally, the seller hands over all necessary documents, such as titles, deeds, and any required regulatory approvals.
The buyer then takes over business operations, which includes updating registrations, licenses, and permits to reflect the new ownership. Employees, suppliers, and customers are informed of the change in ownership.
After the sale, the seller may need to fulfill post-sale obligations outlined in the agreement, such as non-compete clauses or providing training and support.
The final step is to settle any outstanding debts and distribute the sale proceeds according to the agreed terms.
It is good form to tell employees as soon as possible about the sale of the business and clearly explain how the transition will affect their roles, responsibilities, and job security. This can help reduce any uncertainty for them and build trust.
You could also set up a forum for employees to ask questions and express their concerns about the sale through meetings, Q&A sessions, or one-on-one discussions. In the forums, address their concerns honestly and provide as much information as possible about the new ownership, any changes in policies, and their future within the company.
If a buyer discovers issues during due diligence, they may renegotiate the terms of the sale of the business, such as lowering the purchase price to account for the identified problems or requesting that the seller address the issues before completing the sale.
In some cases, the buyer might request warranties or indemnities to protect against potential future liabilities.
If the issues are significant and can't be resolved, the buyer may withdraw from the deal entirely.
This step is often covered by a due diligence contingency in the purchase agreement, allowing the buyer to back out without penalties if major problems are found.
You may be able to stay involved with the business after selling it, depending on the terms negotiated with the buyer.
Common ways to remain involved include taking on a consulting role, where you provide expertise and guidance during the transition period.
Another option is to stay on as an employee or in an advisory position, which can help ensure continuity and stability for the business.
When a business is sold, the proceeds from the sale are shared among the shareholders based on their ownership stakes and the terms outlined in the company's articles of association and shareholder agreements.
Here's how it works:
The distribution process can be influenced by specific terms outlined in shareholder agreements. Such as provisions for vesting schedules, liquidation preferences, or other conditions that affect how and when shareholders receive their share of the proceeds.
Here at Lawhive, our expert corporate solicitors can support you with your business sale by guiding you through:
Contact us today to get started.
With straightforward pricing - so you know exactly what to expect at every step.
