Share Sales and Purchases

Buying or selling shares in a company is different from buying or selling its assets: you’re taking on, or handing over, the whole business, including its liabilities, contracts and trading history. Getting clear advice early helps you understand the structure of the transaction, the risks involved, and the responsibilities that continue after completion.

If you’re buying shares

Before you commit to a purchase, it helps to know exactly what you are acquiring, since you’re taking on the company as a whole with all liabilities, not just selected assets.

• We explain the key stages of a share purchase, including the proposed structure, timetable and the practical steps needed to get from initial discussions to completion
• We work with your accountant, tax adviser and other professional advisers to consider funding, tax, financial information and the wider commercial implications of the purchase, including what any financial and tax due diligence turns up
• We guide you through due diligence so legal, financial, contractual, employment, property and regulatory issues are identified and addressed before you become committed to the transaction
• We review and explain the transaction documents: the share purchase agreement, disclosure letter, tax covenant, board and shareholder approvals, ancillary documents and any funding or security documents
• We advise on the negotiation points that matter most, including warranties, indemnities, limitations on liability, completion accounts, earn-outs, restrictive covenants and post-completion obligations
• We advise on any red flags that come up and produce a report setting them out clearly
• We advise on any lending and security requirements involved in funding the purchase

If you’re selling shares

There are many reasons to sell shares in a company: an exit, a new investor, a sale to management, or a transfer to a third party. Whatever the reason, preparation makes the biggest difference to how smoothly it goes.

• We help you understand the sale process, the likely timetable and the information a buyer will expect to review
• We work with your accountant and tax advisers on the financial and tax implications, and on your objectives after completion
• We help with due diligence and disclosure, including preparing replies to enquiries, identifying documents for disclosure and handling issues in a controlled and strategic way
• We explain the share purchase agreement, disclosure letter, tax covenant, board and shareholder approvals, completion documents and any documents dealing with and redemption of loans, other forms of security and director resignations or transition services following the sale
• We support you through negotiations on warranties, indemnities, price adjustments, deferred consideration, restrictive covenants and post-completion arrangements

A share sale isn’t the same as an asset sale: the buyer takes on the whole company, not just the parts you choose to sell.