How to buy or sell your business: step 5 – completing the deal
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How to buy or sell a business: Step 5 – completing the deal
In this last of our five-part five series we will discuss what happens at completion. Be sure to check out the other steps to make sure you know what to expect when buying or selling your business:
Step 1 – Establishing the terms of the deal and confidentiality
Step 4 – Dealing with disclosure
Step 5 – Completion
Step 5 – Completion
Completion is the final stage of the transaction, at which point (depending on the terms of the contract) the legal transfer of ownership takes place and payment of the consideration is made to the seller. Both parties will sign (or execute) the necessary legal documents to effect the transfer, the principal documents being the asset purchase agreement (in the case of assets) or share purchase agreement (in the case of shares) and the disclosure letter (see Step 3 – The Contract and Step 4 – Dealing with disclosure). There will also be various ancillary documents to be signed, such as company board minutes and resolutions, letters of resignation and appointment, Companies House forms and so on.
Documents can be signed electronically, although physical meetings do sometimes take place at which hard copies are signed by hand. It is often down to personal preference and practicality.
It’s possible that completion of the transaction is an entirely different step from exchange of contracts but this blog is considering the situation where exchange and completion happen simultaneously.
The documents are only binding on the parties once they have been both signed and dated, and (where there isn’t a physical completion meeting at which all parties sign the same documents) counterparts will need to be exchanged to ensure that each party has a copy for future reference.
Once the deal has completed, there will be a number of post-completion steps to tackle, which may include:
- informing various interested parties (suppliers/staff/customers) that a change of legal ownership has taken place;
- updating the company’s registers and (in the case of a share sale and purchase) paying stamp duty;
- making a press release/statement; and
- (particularly important for a seller) considering estate planning and whether or not your will needs updating,
and don’t forget … celebrating completion!
Contact us
If you need help buying or selling a business, Daniel Halls, a solicitor in our Corporate & Commercial team, is here to help you every step of the way. Call Daniel on 01825 744435 or email him at danielhalls@rixandkay.co.uk.
For more information on how Daniel and the Corporate & Commercial team can guide you through your sale or purchase, don’t hesitate to contact us.
