Business Sales and Purchases in England and Wales

Overview

A business sale or purchase is one of the most significant transactions a company is likely to undertake. It may involve the sale of shares in a company, the sale of a business and its assets, or the acquisition of a target business as part of a wider growth strategy.

The legal structure matters. A share sale usually transfers ownership of the company itself. An asset sale usually transfers selected assets, contracts and liabilities. The difference affects risk, employee arrangements, tax, regulatory approvals and transaction timetable.

Key risks include undisclosed liabilities, poorly drafted sale documents, employee transfer issues, change of control restrictions, data protection concerns and post-completion disputes.

This article explains the main legal and commercial issues business owners, directors, shareholders and investors should consider. Early legal advice can help identify the right transaction structure, reduce risk and keep the process moving efficiently.

Key Legal and Commercial Considerations

Key issues usually include:

• whether the deal should be structured as a share sale or an asset sale

• who has authority to approve the transaction

• whether shareholder consent is required

• whether third-party consents are needed under customer, supplier, finance or property documents

• whether employees will transfer

• what warranties, indemnities and limitations on liability should be included

• whether merger control, change of control or sector-specific approvals apply

• how confidential information will be shared during due diligence

• what post-completion filings and notifications are required

A share sale often appeals to sellers because the business usually transfers with its contracts, goodwill and workforce intact, subject to any contractual restrictions. Buyers, however, may be taking on historic liabilities inside the target company.

An asset sale can allow a buyer to select the assets it wants to acquire and leave behind certain liabilities, but the transfer process is often more document-heavy. Contracts may need to be assigned or novated, property transferred, and employees considered carefully.

Directors should also remember that they must comply with their statutory duties throughout the transaction, including managing conflicts and making decisions in the company’s interests.

When Should a Business Seek Legal Advice?

Legal advice is often valuable at an early stage, especially when:

• a business owner is considering a sale or partial exit

• a buyer is deciding between a share purchase and an asset purchase

• the business has multiple shareholders or complex constitutional documents

• the target has key commercial contracts with change of control clauses

• regulated activities are involved

• employees may transfer under an asset sale

• confidential or personal data will be shared in due diligence

• there are intellectual property, property or licensing issues

• the transaction involves deferred consideration, earn-outs or completion accounts

Early legal input often helps businesses avoid delays, improve deal certainty and negotiate more effective protections.

Common Mistakes or Risks

Common problems include:

• choosing the wrong deal structure

• failing to review the company’s articles, shareholder agreements or finance documents

• overlooking regulatory approvals

• inadequate due diligence

• weak or inconsistent warranties and indemnities

• sharing excessive confidential or personal data without proper safeguards

• failing to deal with employee issues early

• poor management of exclusivity and heads of terms

• underestimating post-completion obligations

These mistakes can lead to financial loss, disputes, completion delays, regulatory exposure and increased transaction costs.

What Happens If You Choose the Wrong or Inexperienced Solicitor?

Using the wrong adviser can create serious problems. Common risks include:

• defective share or asset transfer documentation

• missed consent requirements

• inadequate due diligence

• weak warranty or indemnity protection

• poor handling of confidentiality and data-sharing

• avoidable delays and cost escalation

• failure to identify regulatory issues

• increased risk of post-completion claims

In business transactions, legal detail matters. A missed issue before exchange can become an expensive dispute after completion.

How Can Alstern Solicitors Help?

Businesses operate in an increasingly complex legal and regulatory environment. Obtaining timely and commercially focused legal advice can help organisations manage risk, protect valuable assets and support sustainable growth.

Alstern Solicitors is proud to be a trusted law firm regulated by the Solicitors Regulation Authority (SRA) in England and Wales.

We provide practical, commercially driven legal advice tailored to the objectives of businesses, directors, shareholders and investors. Our approach combines legal expertise with a clear understanding of commercial realities.

Our clients benefit from:

• Strict confidentiality

• Full compliance with UK law and regulatory requirements

• Transparent fee structures

• Efficient transaction management

• Commercially focused legal solutions

• Professional support throughout the process

We work closely with businesses to identify risks, protect opportunities and provide practical legal solutions that support long-term success.