We have Leicester offices at Meridian Business Park (off junction 21 of the M1) and Market Harborough.
We understand that you will have your own particular concerns, when preparing or negotiating the contract documents, and we look to tailor them as far as possible to suit your individual needs and protect your interests.
If you are considering buying a business, have any questions or would like to discuss further, then please Contact Us.
If you are buying a business then you should speak to a solicitor who specialises in acquisitions.
This overview sets out some key points and questions for you to consider.
This is a key question which should be considered at an early stage. There are advantages and disadvantages to each option (including time, tax and legal implications). Generally, asset deals are more buyer friendly but they can require significant practical implementation in relation to the transfer of key contracts. For further information in relation to the differences between the structures please see here.
This is a subject to contract document (also known as a Memorandum of Understanding) which sets out the main deal terms.
This could set out matters such as:
Whilst Heads of Terms are usually non-binding (save for exclusivity and confidentiality provisions) they set out the headline terms and can save time and cost in negotiating the principal deal documents.
Legal advice should be taken before signing Heads of Terms as it may be difficult to renegotiate the key terms during the transaction.
A prudent buyer will want to learn every aspect of the business including legal and tax implications, employee structures, existing debts, property, assets and liabilities, key contracts, customer and supplier information and risks.
A due diligence exercise should allow a buyer to:
Problems with a company’s share/corporate history can cause significant issues (i.e. can a buyer be confident that the business has no other shareholders).
Warranties are contractual statements of truth given about the status, position and affairs of the company and its assets and liabilities at completion.
These should be bespoke to your deal to provide protection in relation to the specific business you are buying and also to keep costs proportionate. In relation to the latter, if warranties are not specific to the business then this can increase the amount of time and cost required negotiating with the seller’s solicitor.
Warranties serve two purposes:
Warranties are a key buyer protection. They are often negotiated to include financial, time and other limitations in favour of the seller to reach a fair position between the parties. It is important that any limitations are carefully considered from a risk perspective.
If a warranty is untrue then damages are assessed on whether the shares/assets are worth less than their warranted value.
An indemnity is stronger protection for a buyer as it is a promise from the seller to pay the buyer’s losses on a pound-for-pound basis (rather than needing to prove that the shares/assets are worth less). They are usually reserved for risks a buyer considers unacceptable and require the seller to be fully responsible for should there be an issue. A buyer may not be prepared to agree to limitations to the indemnity protection.
Buyers usually do not want a seller competing with them after the deal, having paid significant money for the goodwill in the business.
Restrictive covenants are often placed on a seller on:
Restrictions should be drafted carefully (in relation to scope and duration) as they will be unenforceable if they do not protect a legitimate business interest and are unreasonable.
Sellers are usually required to enter into confidentiality undertakings not to disclose the company’s confidential information and trade secrets.
Buying a business is far easier to do when you have someone by your side who is experienced and can advise you on the best course of action and how to overcome the obstacles as they arise.
At Lawson West, our approach is to support and help guide you through to a successful outcome and be on hand to answer your questions.
If you’re considering buying a business and want to discuss your options, then please contact Rebecca Beswick or Louis Tranter on 0116 212 1000 or email rbeswick@lawson-west.co.uk
From initial partnership or shareholder agreements to company acquisition or disposal, we support every transaction along the way. You can rely on our dependable experience of what not to do and likely obstacles along the way, to determine the best course of action. We know the pitfalls and delays that could jeopardise your aspirations and we have strong relationships with finance and accounting professionals to support your transaction or deal to achieve the best outcome.
Our dependable team has a talent for understanding your needs and we look forward to helping you.
Great client service is at the centre of our thinking, it’s embodied into how we train and develop our staff, how we help our clients and how we advise and assist people and business owners with their legal needs.
Our Core Values are Welcoming, Confident, Supportive, Knowledgeable and Dependable and we aim for clients to have a positive experience with Lawson West Solicitors.
Evidence of our great client service can be seen in the reviews and testimonials we regularly receive. We are always pleased to receive great reviews because it means our clients are happy with the service we provide, and it shows that we deliver on our core values, we don’t just talk about them. We really welcome client feedback and hope you enjoy reading some of the latest testimonials throughout this website.
