If you are planning to buy all or a substantial amount of the shares in a company you will want to ensure that you are well advised throughout the process and that you have a good understanding of the process and the legal and financial issues and risks that arise both during and after your purchase.
The process of purchasing the shares in a private limited company will usually start with very limited discussions between you and the seller. Once you have established that they are prepared to sell and you are interested in purchasing the shares you will need to use the Share Purchase process effectively to ensure as far as possible that you are getting all that you expect and that the company you are buying is not vulnerable to legal and financial or commercial risks that have not been made clear to you.
As a buyer the process will centre for you on reviewing and if need be challenging the information and documents made available by the Seller for due diligence, and also ensuring that the Share Purchase Agreement is appropriately negotiated and provides all reasonable comfort to you as to the condition of the business you are buying.
The process for a share purchase generally works as follows:
Confidentiality Agreement: the Seller will require you to agree that the business information they share with you will not be disclosed to anyone else and will not be used by you to compete with the company. The seller’s solicitors usually draft this agreement, but you will need to check that it does not impose any inappropriate obligations on you.
Due Diligence: Your solicitor will provide the Seller with a set of enquiries about the state of the company and its business and the seller will disclose to you all the information relevant to these enquiries. This is a key part of the process for you and provides a very practical opportunity to identify any problems, such as unpaid tax or other bills, serious litigation, health and safety or other regulatory issues.
Share Purchase Agreement: Your solicitor will draft this agreement in order to obtain the appropriate formal confirmations from the seller as to the good condition of the company and its business and where appropriate to allow you a mechanism to make claims against the seller for problems that you discover after completion. There will usually be a Disclosure Letter and perhaps a Consultancy agreement or other documents to agree with the Seller.
Completion Formalities: this will include finalising the deal documents; obtaining stock transfer forms; payment of the purchase price and Stamp Duty.
Reasons To Choose Huntley Legal
We know how important it is to trust your legal team in such an important transaction. Our team will use their many years of experience to ensure that your company purchase goes smoothly and without a hitch, as far as we can control the process.
Our team of experienced corporate lawyers will complete all the necessary legal work for the company purchase and work to your deadlines as far as possible. Our credible team will support you throughout with a no-nonsense approach to legal services by ensuring that you are up to date with progress of the sale at all times and that you are clear about any of the issues that may present a challenge.
Talk to one of the corporate legal service team today about how we can help you with a company purchase or share purchase.
Contact The Corporate Team Today
For help with the purchase of a company, you need a professional and experienced team like us, so please call us now on +44 (0)20 3642 3310, and we’ll be delighted to help you.
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To discuss your legal needs, please call Marie Huntley on 020 3609 8764.
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