Buying a business
Specialist solicitors for private company acquisitions

London based specialist law firm working with private companies of all shapes and sizes across many sectors. Typical deals range from £1 million to £30 million and above.

We provide fee estimates to leave you in control of legal spend. Please do call as there is no charge for initially discussing the transaction and plotting the path.


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If you are thinking of buying a business we can make it happen on the best terms achievable. We have handled many transactions and understand how to manage a successful transaction.
We provide fee estimates for all work associated with purchasing a business, to leave you in control of legal cost.
Why choose us as your lawyers when buying a business?
- We are a specialist law firm focused on private companies and shareholders. We work on big and small transactions.
- We stick to agreed time-frames and appreciate urgency. We have the resources to be flexible.
- We review or prepare the business purchase contract and associated documents. We are able to deal with all aspects from commercial property through to tax and technology.
- We are confident in our advice giving you clear choices on the difficult issues.
Preparing to buy a business
Before you get to legal agreement stage, a well planned transaction will start with heads of terms setting out the basics and confidentiality requirements. This can be a short concise document but it is important and it sets the agenda and timescales. We will help you to include everything you will need.
We can produce the business purchasde contracf and documents for you or review documentation prepared by the seller. Usually the buyer is in a stronger position if it controls the documentation and produces the first draft. What goes into the sale documentation depends very much on the nature of the acquisition, appetite for risk and purchase price. Using our experience we guide on what is reasonable.
Key negotiating points
- Warranties: as to the state of the business. For example, if you are buying a trading platform you want to be able to take steps and recover consideration if it turns out the sellers do not own what they have sold.
- Indemnities: in relation to known business liabilities. For example, if a supplier has not been paid substantial sums owed to it by the sellers you need to know about this before you complete.
- Withholding part of purchase price: retaining part of the purchase price during the warranty period – known as deferred consideration or earn out.
- Price reduction: it is not unusual with business acquisitions that as the seller discloses details of the business there is an opportunity to negotiate further on price.
- Practicalities: for an outright purchase, e.g. the mechanics of handovers, access to the banking, websites, client databases, and customer review platforms etc.
- Restrictive covenants: to prevent the seller setting up again in competition. Without such covenants the seller, and those connected with the seller, are not restricted – damaging the investment. The restrictive covenants will need to be tailored to the industry, location of the target business, and plans for growth. For example, if you’re buying a business with plans for expansion in the EU, then the restrictive covenants should cover that territory to prevent the seller from taking a slice of the market, in turn, damaging your investment.
Assets or shares?
Commonly, there are two types of business acquisitions:
- Share purchase – the buyer buys all the shares of the company complete with its assets, rights and liabilities, both past and present. There may be change of control provisions in the business contracts, particularly with customers. Otherwise, the change of ownership should not affect trading.
- Asset purchase – where you may want some but not all of the business. Under an asset purchase agreement the buyer takes the assets it wants and leaves behind parts of the trade not required. As with a share purchase agreement, you should secure warranties on an asset purchase to protect the buyer from inheriting more than it plans to inherit. In some cases warranties are not practical and the acquisition price reflects the buyer’s risk.
Why are warranties so important?
The general principal under English law is “caveat emptor” or “buyer beware”. This means a buyer takes on the business risks. Warranties are legal statements about the business, given by the seller to the buyer. As a buyer, if you do not secure warranties from the seller you will be exposed. Warranties typically cover :-
- Assets, e.g. intellectual property;
- Liabilities;
- Accounts
- Employees
- Commercial contracts
- Tax.
- Performance;
- Any disputes or potential disputes involving the business.
Warranty negotiations when purchasing a business will include:
- Facts: the seller will want to be very careful as to what can or should be included in warranties;
- Caps and limitations : on the amount buyers can claim under the warranties. As a buyer you will want to push back on attempts to cap or limit claims where there is a breach of warranty; and
- Time: process as to what happens if there is a breach of warranty, how to give notice of warranty claims and/or initiate legal proceedings in relation to those claims.
If the warranties do not turn out to be true, the buyer can claim for breach of warranty, i.e. sue for the damage suffered. Selling shareholders usually have personal liability for a breach of warranty. You could see warranties acting as a form of retrospective price adjustment in a business sale.
Sellers avoid giving warranties. Sellers argue that warranties are redundant if the buyer and their advisors undertake adequate due diligence. If forced, sellers try to limit the warranties’ scope and cap their liability. Sellers usually retain the opportunity to remedy, i.e. fix, any breaches of warranties, providing they can do so within a specified time.
What happens to the employees?
If you want to retain employees and/or avoid claims then you will need to deal with employment law issues arising on the purchase. Important steps to take will include :-
- Review existing employment contracts – highlight any onerous terms such as variations to the terms and bonus entitlements;
- Review restrictive covenants – to ensure they match business requirements and you can enforce them;
- Manage re-organisations or redundancies – which may flow from buying the business and the review of the current employees’ restrictive covenants; and
- Implement employee incentives – to encourage the newly acquired workforce.
If you are buying a business, whether the entire shares or the assets of the business, get in touch with us for a discussion and a fee quote.

Catherine Gannon
02074381060
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catherinegannon@gannons.co.uk
Catherine has been qualified for over 20 years. During that time, she and her team have advised hundreds of business buyers. Acting on business acquisitions is a core part of Gannons expertise.