Selling and Purchasing Businesses

For business sales, acquisitions and mergers Hewetts have the experience and expertise to help you through the process.  Acquiring or selling a company is a major process and requires considerable legal expertise, not just the preparing and drafting of documents, but also in advising on the easiest route forward given the myriad things that must be taken into account.

We can help by advising you on:

• Sale or assets purchase or share transfer.
• Sale of business with goodwill.
• Advice on warranties as to the financial status of the business and structuring of purchase price.
• Intellectual property (copyright, patent and trademark) issues arising from sales, acquisitions and mergers.
• Commercial property elements of the transaction.
• TUPE i.e the extent to which employees must be transferred to the new company. 
• The introduction of new contracts of employment.
• Structuring of purchase price in the form of lump sum instalments, royalties.

 

Please contact Geoff Kew for further advice and assistance.

Frequently Asked Questions

1.   Can I split the purchase price so that I pay for property and goodwill of the business separately?

Yes.  It is a question of being realistic and this may have the impact of reducing any stamp duty payable on the property element of the acquisition.  Sometimes a valuation is necessary to ascertain the correct price for the property goodwill, stock and other assets.

2.   Should I sell or purchase the business as a transfer of shares or sale of assets? 

This depends on the nature and structure of the business and usually whether or not you wish to continue with the trade name of the business.  We will be able to advise you on this aspect.

3.   Do all of the employees have to be transferred to the purchasing company?

Transfer of Undertakings (Protection of Employment) Regulations (know as TUPE) are the Regulations that apply to transfer of any business.  Generally speaking TUPE requires that employees follow the business i.e that they are not made redundant and that they are transferred to the purchasing company.  They should be transferred on similar terms to their current employment and at the least under no worse terms.  TUPE generally applies to sale of Share Agreements and Sale of Asset Agreements. We can advise you more specifically to the impact of TUPE upon the transaction.

4.   Can you act for the seller and the purchaser of the business? 

Usually it is not possible to do this as a conflict of interest would arise.  It is usual that the purchaser’s solicitor will prepare the business purchase contract and the seller’s Solicitor will approve the same, making appropriate amendments.

5.   What is due diligence and who undertakes it?

Due diligence is the process by which thorough investigation into the business is made before committing to purchase.  This includes enquiries about the financial status of the business the customers of the business the employees of the business and the contractual relationships of the business.  Ordinarily this is carried out by the purchaser’s Solicitor but can be carried out by the purchaser himself with the assistance of his accountant in certain circumstances.

6.   Will I have to pay stamp duty on the acquisition of the business? 

If the business includes the transfer of a property then stamp duty may be payable depending upon the value of the property. 

7.   I am selling my business and would like to be reemployed by the purchaser as a consultant for a fixed term.  Is this possible?

It is quite normal that the seller acts as a consultant for 2 or 3 years under a fixed term employment contract to assist the smooth transition of the business from the seller to the purchaser.