Selling a business
Your solicitor will need to draft the Asset Purchase Agreement for the sale of goodwill and assets. If you are selling a limited company the buyer’s solicitor will need to draft a Share Purchase Agreement.
You will also need to list exactly what is included in the sale, for example, Fixtures and fittings, employees being transferred, and any stock.
Once an offer has been made the buyer’s legal team will conduct due diligence to make sure there are no unforeseen liabilities. Due diligence can be a lengthy process, but it is essential. The buyer’s due diligence inquiries could include: The last three years of accounts, whether any of your assets are on hire purchase, and whether you have made any insurance claims and if there are any claims pending by employees.
The buyer may want to obtain a report on the following issues:
The environmental report will tell you if there is any potential contamination on the land.
Is the location subject to flood risk?
Water and drainage search
Is the property connected to mains water and is the drain connected to the sewers?
Local authority searches. This will red light any planning permission that has been granted or is likely to be underway. It will also tell you if the building is in a conservation area.
Finally, once we agree on the asset purchase agreement and the due diligence enquiries have been satisfied by the buyer’s solicitor, then we can complete.