Acquiring and Buying a Business Solicitors
Whether you’re an experienced business owner or this is your first venture, acquiring or buying a business can seem like a daunting process.
Our corporate and commercial lawyers can help guide business owners through acquisitions, advising on the transaction process and legal documentation, and often project managing to ensure the deal gets done.
If you are buying a business, it is important to seek expert legal advice early in the transaction. Our commercial solicitors can work with you on deciding the deal structure, carrying out due diligence and advising on the contract side. You will also need to consider any employees you are taking on and the premises the business operates from, be that office or work space, retail premises or larger spaces such as warehouses. At this point, we will draw on the expertise of our employment law team and commercial property solicitors, and provide you with a joined-up and streamlined service.
We appreciate that not all clients want or have the budget for a ‘belts and braces’ legal service, particularly where the business is relatively simple or the price being paid is low, or where you have made a number of similar acquisitions and can streamline your approach to the process. Our commercial solicitors will discuss the options for our level of involvement and the associated costs with you, so you can make an informed choice to ensure you are getting value for money.
The process of buying or acquiring a business
Deciding on the transaction structure
The structure will be driven by various factors, including deciding what you want and what you don’t want to acquire. You will also consider the practicalities around the transfer of control and any tax implications.
On a share purchase, you (the buyer) acquire the target company with all its assets, employees and contracts. You’ll also inherit the liabilities and obligations of that company. It doesn’t look like a huge change from the outside world as customers/clients and suppliers continue their existing relationship with the company under a new ownership structure.
With this type of purchase, only the assets and liabilities which you opt to take on get acquired. Everything else stays with the selling company. There is one exception, however, which relates to employees. Under UK law, employees will automatically transfer over to the buyer on their current terms of employment, meaning you may need to consult with them in relation to your plans around buying the business.
Our Corporate and Commercial solicitors, along with the expertise of our Commercial Property and Employment solicitors, can advise on the appropriate structure in light of the particular facts and circumstances and help the acquisition process to run as smoothly as possible for you, whichever structure you go with.
What is due diligence?
Due diligence is the investigation that you are expected to carry out before entering into an agreement or contract with another party.
What due diligence should I carry out when buying a business?
As a buyer, you should gather as much information as possible through due diligence. This is to ensure you fully understand what you’re acquiring and are happy you are paying the right price.
This due diligence will help you evaluate the strengths and weaknesses of the business. It identifies any risk areas which might impact on the deal. It will also highlight any third party consents that you’ll need in connection with the acquisition.
Our Corporate and Commercial lawyers can advise on the legal aspects of due diligence as part of the buying process. We can work with other advisers you’re using for this, such as accountants carrying out financial and taxation due diligence.
Getting the deal done
As well as the main contract for the purchase, there will be various other legal documents which need to be agreed and put in place.
It may be that you want a detailed review and full negotiation of the documentation. Or you may prefer just a high level review to explain the key terms to you before you sign. Much will depend on the type of business, the size of the deal and the level of risk involved. Our commercial lawyers will discuss the appropriate approach for you at the outset of the deal.
We pride ourselves on being responsive and proactive. Our commercial law solicitors help clients find solutions to issues that crop up along the way. We play a hands-on role in making sure the deal gets done as quickly and efficiently as possible.
Thinking of buying a business? Contact our commercial solicitors in Bristol
Whether you need to talk through your options for an acquisition or are already in discussions with a seller and want to appoint a lawyer to advise you on the purchase, get in touch with our expert team by calling 0117 325 2929 or fill out our online enquiry form.