Buying and selling businesses

The process of buying and selling a business is complex and requires expert legal advice. Whether you are purchasing a pre-existing business or selling a venture that has been part of your life for many years, we will ensure that your best interests are protected.

With nearly 60 years’ experience in Mid-Sussex, we have long-standing relationships with local financial and business professionals to assist us in ensuring your matter is completed efficiently and with proper due diligence. Our business clients include many local organisations plus many from greater Sussex and London.

What is the basic procedure in buying a business?

Buying your own business is both exciting and nerve-racking. Stepping out on your own always involves risk, but the rewards can be incredibly lucrative, both financially and personally.

Once you have found a business to buy and obtained finance you need to ensure you have covered all the following steps thoroughly:

Step 1 – Your due diligence

This is the fact-checking stage. You and your lawyer and accountant need to go over the businesses books, suppliers, existing contracts, employees, the business premises and any potential problems that may affect your future ability to profit from the venture. Investing in proper due diligence can save a lot of time and money in the long-run.

Step 2 – Negotiation

After conducting valuations you will need to negotiate a price with the seller. If you have preformed proper due diligence then you may have found some weaknesses in the business in which you can justify negotiating a lower price than the one originally offered.

Step 3 – Drafting of the Heads of Agreement

This document outlines the details of the sale. It is only partially binding, you can still walk away from the deal once it is signed. It simply outlines the terms and conditions of the sales and how it will proceed and provides a timescale for the sale procedure. It is vital that it is drafted correctly as a poorly written Heads of Agreement can cause delays and confusion when it comes to negotiating the final contract for sale.

Step 4 – Professional due diligence

This is where your legal and accounting team investigate the business thoroughly and ensure everything is as it should be.

Step 5 – Drafting the sale and purchase agreement

The official Sale and Purchase Agreement will be drafted which will include the final purchase price and any covenants to be put in place.

Step 6 - Completion

Once all the documents are signed you can pop open the champagne and celebrate, you now own the business.

What is the basic procedure in selling a business?

The steps and procedure for selling a business are very similar to buying a business (aside from due diligence), but as a vendor you will need to also consider:

• Tax implications, especially Capital Gains Tax
• Warranties and indemnities

Why engage Bennett Oakley Solicitors?

We can provide the professional experience and expertise you need to ensure the sale or purchase of your venture runs smoothly and successfully. We make ourselves readily available to our clients in order to answer any questions they may have and we pride ourselves on the precision in which we draft our documents. By offering fixed-fee pricing we allow you to budget in advance for your legal costs.