Selling a business is often the result of years of work, planning and perseverance. But when the time comes to sell, the biggest challenge is rarely finding a buyer – it’s navigating the legal and commercial steps that make a sale successful.Whether you’re planning a full exit or transitioning to a new venture, preparing for a sale involves far more than finding a buyer and agreeing a price.
Here’s what you need to know when you’re planning to sell a business in the UK.
1. Understand the Sale Structures: Asset vs Share Sale
There are two common ways to structure a business sale:
Asset Sale:
You sell selected assets such as stock, equipment, contracts or goodwill. Buyers can choose what they take on, making this attractive to purchasers, but it may trigger third-party consents or require new contracts.
Share Sale:
You sell your shares in the company, transferring ownership entirely. The buyer acquires the company “as is,” including liabilities and obligations. This can be quicker and more efficient for the seller, but may present more risk for buyers.
The right structure for selling a company depends on your tax position, risk profile, liabilities, and the buyer’s commercial objectives.
2. Get Your Documentation in Order Early
Clear, well-organised paperwork strengthens your position and builds buyer confidence. Preparation can also reduce delays and reduce the risk of buyers renegotiating the price.
Key documents include:
Preparing early also supports a smooth due diligence audit, which buyers will expect.
3. Due Diligence – What Buyers Will Look For
When a buyer considers purchasing your business, they will want to understand exactly what they are acquiring. Expect a thorough review of:
This process can feel demanding, but addressing potential concerns in advance often avoids delays or price reductions. Your solicitor can help you prepare and respond confidently to buyer queries.
If your business owns valuable IP or confidential information, ensuring these are properly documented is essential.
4. Completion Accounts vs Locked Box
How the final purchase price is determined can have a significant financial impact.
Completion Accounts
The price is adjusted after completion based on the actual financial position at the time of sale. This offers flexibility but can lead to post-completion discussions if figures differ from expectations.
Locked Box Mechanism
The price is fixed based on a historic balance sheet. The seller guarantees that no value has been taken from the business since that date. This approach gives greater certainty and often accelerates negotiations.
The best approach depends on the complexity of the business and the deal dynamics.
5. Your Deal Team Matters
A well-structured sale is always supported by the right advisers. Key members of your deal team may include:
With the right team in place, you can focus on the future while professionals guide you through the sale process.
Considering selling your business? Speak to our expert Corporate Services team to start the journey with clarity and confidence.
FAQs About Selling a Business
If you’re considering selling your business, our expert Corporate Services team can guide you through each stage of the process with clarity and confidence.
Visit our Business Services or Business Contracts pages, or contact us to discuss your plans.
Disclaimer: The information provided on this blog is for general informational purposes only and is accurate as of the date of publication. It should not be construed as legal advice. Laws and regulations may change and the content may not reflect the most current legal developments. We recommend consulting with a qualified solicitor for specific legal guidance tailored to your situation.
Written by Christopher Buck
Associate Partner, Business Services at Franklins Solicitors LLP
Specialises in insolvency law for practitioners and funders, commercial contracts including IT and franchise agreements, dispute resolution through to High Court appeals and intellectual property including trademarks, copyright and confidential information.
Christopher Buck is an Associate Partner and Commercial Services Solicitor at Franklins Solicitors LLP. He joined the firm in 2005 after graduating from the University of Reading and the College of Law in Guildford, qualifying in 2007 and becoming an Associate Partner in 2012.
Christopher specialises in insolvency, commercial contracts, dispute resolution and intellectual property. He acts for clients across sectors including IT, manufacturing and recruitment and has notable experience in high-value insolvency litigation and complex contract negotiations. He also advises on IP enforcement, trademarks and e-commerce compliance.
Known for his attention to detail and pragmatic advice, Christopher is also involved in mentoring and recruitment at the firm, helping develop future legal talent.
Outside of work, Christopher enjoys music, supports MK Lightning ice hockey and spends time with his two children.
