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Transactions · UK business guide

Buying or Selling a Business

Choose the deal structure, investigate what is really being transferred, allocate liabilities and plan a completion that works after the signatures are collected.

Jurisdiction: United Kingdom. Tax, property, employment and filing requirements can vary with the deal structure and the jurisdictions involved.

At a glance

  1. 01

    Choose what is being sold

    Decide whether the buyer will acquire shares in a company or selected business assets, contracts, staff and goodwill.

  2. 02

    Investigate and allocate risk

    Use focused due diligence, warranties, indemnities and disclosure to test the value and liabilities behind the price.

  3. 03

    Control completion and handover

    Coordinate consents, employee steps, payments, releases, records and practical handover before the business changes hands.

What this guide covers

Make the legal decisions in the right order

A business sale is not only a price negotiation. The parties first need to agree what is changing hands. In a share sale, the company usually keeps its assets, contracts and liabilities while ownership of its shares changes. In an asset sale, the buyer acquires the assets and rights named in the agreement, so contracts, intellectual property, premises, licences and employees may need separate transfer steps.

The legal work should follow the commercial deal. Heads of terms can record the structure, price mechanics, exclusivity and timetable. Due diligence then tests the assumptions behind those terms. The sale agreement, disclosure process and completion checklist should resolve the issues that matter to this business rather than repeat a generic list of warranties. Tax treatment, TUPE, third party consents and any transfer of a property business need early specialist input.

Decision path

Work through the issue before committing to a course of action

Start with the first stage, then follow the sections that match the route you identify. Keep a written record of the facts, evidence and decisions.

  1. 01

    Choose between a share sale and an asset sale

    Start with the deal perimeter. The structure determines what transfers, which liabilities remain and what third party action is needed.

    • Share sale. The buyer acquires shares in the company. The company generally remains the employer and contracting party, but change of control clauses, licences and financing arrangements may still require consent or notice.
    • Asset sale. The agreement must identify the assets and liabilities being transferred or retained. Contracts, property, intellectual property, data and registrations may each need a different transfer mechanism.
    • Price and tax. The structure can affect price allocation, VAT and the tax position of both sides. The commercial team should test the proposed structure with tax advisers before the documents harden around it.
    • Operational reality. A legally possible structure may still fail if customers, suppliers, staff, systems or premises cannot move on the planned timetable.

    Checks to make

    • Write a schedule of every share, asset, contract, employee and liability that should transfer or remain.
    • Identify tax, VAT, accounting and funding assumptions that depend on the chosen structure.
    • List every consent, notice, release and registration needed before or after completion.
  2. 02

    Run due diligence around the value drivers

    Investigate the matters that could change the price, structure, protections or decision to proceed.

    • Corporate and ownership. Confirm legal ownership, share rights, group structure, charges, constitutional documents and the authority to sell.
    • Commercial position. Review key customer and supplier contracts, revenue concentration, disputes, termination rights and change of control provisions.
    • People and premises. Check employment arrangements, possible TUPE implications, pensions, property rights, occupancy costs and any consent needed for a lease transfer.
    • Assets and compliance. Verify intellectual property ownership, data practices, licences, insurance, tax records and sector obligations that affect continued trading.

    A data room is useful only when requests are proportionate, responses are tracked and important gaps are reflected in the deal documents.

    Checks to make

    • Rank due diligence requests by deal value, operational importance and realistic exposure.
    • Maintain one issues list showing the evidence, owner, proposed solution and document impact.
    • Escalate missing ownership, consent, employment, tax and regulatory evidence before signing.
  3. 03

    Turn findings into contractual protection

    Use the agreement and disclosure process to allocate known and unknown risks, not to hide unresolved commercial questions.

    • Price mechanics. State how the price is calculated, adjusted and paid, including any completion accounts, locked box, retention, earn out or deferred payment arrangement.
    • Warranties and disclosure. Warranties establish a factual baseline. Proper disclosure identifies exceptions and gives the buyer evidence to assess them.
    • Indemnities and limits. Use specific indemnities for identified risks where appropriate, then test caps, time limits, thresholds, exclusions and claims procedures together.
    • Seller finance and security. Deferred consideration creates credit risk. Record payment dates, interest, security, set off rights, information rights and default consequences clearly.

    Checks to make

    • Reconcile the agreement with the heads of terms, diligence findings and current price model.
    • Map each material diligence issue to a fix, disclosure, indemnity, condition or price adjustment.
    • Test every payment, claim and liability limit against a realistic adverse scenario.
  4. 04

    Plan signing, completion and the first day

    Build a completion sequence that transfers legal control, money and operational access in the right order.

    • Conditions and approvals. Identify regulatory clearances, landlord or lender consents, corporate approvals and third party agreements that must be satisfied before completion.
    • Employees and communications. Assess TUPE and information or consultation duties early. Coordinate messages to employees, customers and suppliers with the legal timetable.
    • Completion deliverables. Prepare signed transfers, board records, releases, funds flow, keys, credentials, registers and filing instructions in one controlled checklist.
    • Post-completion work. Assign responsibility for registrations, tax notifications, contract notices, data migration, transitional support and any price adjustment process.

    Checks to make

    • Create a responsibility matrix for every signing, completion and post-completion item.
    • Rehearse the funds flow, document release and access handover before completion day.
    • Set dated owners for filings, notices, integration steps and deferred price calculations.

Common situations

Where businesses usually need to slow down and check the detail

A buyer wants selected assets only

Define the assets and assumed liabilities precisely, then plan contract assignments, employee transfers, data migration, IP ownership and any premises arrangements.

A founder sells the company shares

Check title to the shares, pre-emption and transfer rules, change of control clauses, personal guarantees, director changes and the disclosure package.

Part of the price is paid later

Document the calculation, information rights, payment dates, security, restrictions, disputes and what happens if the buyer defaults.

Employees move with the business

Assess TUPE, identify the affected employees, exchange the required information and run any information or consultation process on the correct timetable.

Selected reading

Understand the issue before deciding what to do next

Start with these articles for the key rules, then check the official sources before you act.

Business sale agreement essentialsUnderstand the core provisions and why a generic template cannot resolve the facts of a specific sale.Share purchase or asset purchase?Compare what transfers, which liabilities remain and how the two structures affect the transaction process.Due diligence and commercial agreementsConnect evidence gathering to warranties, disclosure, conditions and practical risk allocation.Buying a business in the UKWork through the legal checks, contracts and completion steps from a buyer's perspective.Seller financed business salesReview deferred payment, security, information and default issues when the seller helps fund the purchase.TUPE during a business transferIdentify when employee transfer rules may affect information, consultation and the transaction timetable.

Primary sources

Source links checked 2 August 2026. Confirm the current rule before acting.

Questions businesses ask

Quick answers before you take the next step

These answers are general. Check the relevant documents and current official guidance for your particular facts.

What is the difference between a share sale and an asset sale?

A share sale changes ownership of the company, while the company generally keeps its assets and liabilities. An asset sale transfers the assets and liabilities identified in the agreement and may require separate assignments, consents and registrations.

Is due diligence legally required?

There is no single due diligence checklist required for every private business sale. A buyer normally investigates the target to verify value and risk, while directors and regulated parties must still comply with their own duties.

Does TUPE always apply when a business is sold?

No. It depends on the nature of the transfer and the facts. A transfer of shares alone does not usually change the employer, while an asset or business transfer may engage TUPE if the statutory test is met.

Can the seller keep working in the business after completion?

Yes, if the parties document the role, authority, pay, confidentiality, restrictions and exit terms. An earn out or transition arrangement should not rely on an informal understanding.

Can a business sale be treated as a transfer of a going concern for VAT?

Possibly. HMRC conditions must be tested against the actual transfer. A share sale is different because the company's assets remain owned by the company.

Need help putting this into practice?

Put the right documents and advice behind your decision

Business sale agreementPrepare the principal agreement for a defined business sale, including price, risk allocation and completion terms.View fixed-fee serviceLegal due diligence packageInvestigate the legal assets, contracts, liabilities and issues that matter to the proposed acquisition.View fixed-fee serviceCompletion checklistCoordinate the documents, approvals, money, records and practical handover required at completion.View fixed-fee serviceShare sale agreementDocument a transfer of company shares with provisions tailored to the parties and transaction.View fixed-fee service

This guide is general information, not legal, tax or financial advice. The right path depends on the entity, documents and commercial facts.

Related guides

Follow the connected legal decisions

Commercial Contracts and Contract RiskFor contracts governed by England and Wales law, turn the commercial deal into clear rules for scope, payment, liability, intellectual property, changes, termination and disputes.Shareholders and Company GovernanceConnect the Companies Act, articles, shareholders agreement and board process so ownership and decision-making rules work together.Ending Employment: Dismissal and Redundancy in Great BritainThinking about ending someone's employment? Start here. Work out whether you're dealing with redundancy, misconduct, poor performance, ill health or another dismissal route, and what to do next.Intellectual Property and Trade MarksIdentify what the business owns, what must be assigned or licensed and which names, designs or creative works need clearance or registration.
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