TRW & Co · Corporate & Commercial
Business Sale Solicitors in London: Buying and Selling a Business
Business sale solicitors London owners and acquirers rely on structure the deal, protect the price and manage risk when a company or its trading assets change hands. In 2026 that means planning around the higher Business Asset Disposal Relief rate, Companies House identity checks, NSIA filings and the CMA's revised thresholds from the first conversation.
Key pointOn an owner-managed sale, the seller's best protection is usually not the liability cap but thorough, specific disclosure against the warranties, prepared early with the data room.
At a glance
Two basic structures
A buyer acquires either the company's shares, taking all history and liabilities, or selected business assets, which usually triggers TUPE transfers and third-party consents.
BADR now 18%
Business Asset Disposal Relief applies at 18% to qualifying gains from 6 April 2026, up from 14%, within a £1 million lifetime limit per individual.
TUPE information duty
On an asset sale the seller must give the buyer employee liability information at least 28 days before the transfer, and consult representatives where required.
NSIA can void deals
A notifiable acquisition in a sensitive sector completed without government approval is void, so the analysis belongs at heads of terms stage.
CMA thresholds raised
For deals completing after 1 January 2025, UK target turnover jurisdiction rises to £100 million, with a new safe harbour and acquirer-based test.
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What business sale solicitors London clients need: scope of a sale or purchase
Business sale solicitors London owners and acquirers instruct are dealing with one question in many forms: how to move ownership and control of a trading business from one party to another without losing value, staff, contracts or regulatory permissions along the way. That covers the founder selling to a trade buyer, a family selling to private equity, a management buy-out, a carve-out of one division, and a purchase of a competitor's assets out of a restructuring.
Under the law of England and Wales a business can change hands in two basic ways. The buyer can acquire the shares of the company that owns the business, or it can acquire the assets of the business itself: goodwill, contracts, equipment, stock, intellectual property and, often, property. Everything else in the deal flows from that choice: tax, employees, consents, liabilities and the paperwork.
It becomes a legal question earlier than most sellers expect. Heads of terms, exclusivity, confidentiality, the information placed in the data room and the way price is expressed all shape the final contract. Mistakes made before lawyers are involved, such as promising a price "debt-free, cash-free" without defining either term, are hard to unwind later. Our M&A solicitors in London handle the larger, multi-jurisdictional end of the same work.
The legal and regulatory framework for buying and selling a business
There is no single "business sale statute". A transaction is governed by contract law, with a layer of company, employment, tax and regulatory rules that apply depending on the structure and the sector.
Company law
The Companies Act 2006 governs share transfers, the register of members, directors' duties and shareholder approvals. Transactions between a company and its own directors may need member approval as substantial property transactions under section 190. The company's articles and any shareholders' agreement often contain pre-emption rights, drag-along and tag-along provisions and board discretion to refuse to register a transfer, all of which must be checked before signing.
Companies House reforms under the Economic Crime and Corporate Transparency Act 2023 now bite on completion mechanics. Since 18 November 2025, a new director must have verified their identity before being appointed, and a new person with significant control must confirm verification within 14 days of being added to the register. Buyers appointing nominees at completion should build this into the timetable (Companies House).
Employment law: TUPE
On an asset sale, the Transfer of Undertakings (Protection of Employment) Regulations 2006 usually transfer the employees assigned to the business to the buyer automatically, on their existing terms and with their accrued rights. Dismissals because of the transfer are automatically unfair unless there is an economic, technical or organisational reason entailing changes in the workforce.
The seller must give the buyer employee liability information at least 28 days before the transfer, and both parties must inform, and where measures are proposed consult, appropriate representatives (Acas guidance). On a share sale TUPE does not normally apply because the employer does not change. The Employment Rights Act 2025 is being commenced in phases, so buyers should diligence how its reforms affect the target's workforce costs. See our TUPE and redundancy team.
Tax
For individual sellers, Business Asset Disposal Relief reduces Capital Gains Tax on qualifying gains up to a £1 million lifetime limit. The rate was 10% for disposals on or before 5 April 2025, 14% for disposals from 6 April 2025 to 5 April 2026, and is 18% from 6 April 2026. For shares, the company must have been the seller's "personal company" (broadly at least 5% of shares and votes, plus economic entitlement) and the seller an officer or employee, for at least two years before the sale.
Buyers of shares generally pay 0.5% stamp duty or stamp duty reserve tax on the consideration (HMRC). On an asset purchase, Stamp Duty Land Tax may arise on any land, and VAT can be avoided if the sale qualifies as a transfer of a going concern under article 5 of the Value Added Tax (Special Provisions) Order 1995. Our transactional tax lawyers model these outcomes before heads of terms.
Regulatory clearances
The National Security and Investment Act 2021 requires mandatory notification of certain acquisitions of shares or votes in entities active in specified sensitive sectors, and a notifiable acquisition completed without approval is void under section 13. The government is revising the sector definitions, so the current regulations must be checked deal by deal. Asset deals and non-notifiable transactions can still be called in.
UK merger control is voluntary but the Competition and Markets Authority can investigate. For deals completing after 1 January 2025, the target UK turnover threshold is £100 million; the 25% share of supply test remains, with a safe harbour where each party's UK turnover is £10 million or less; and a new test catches acquirers with a 33% share of supply and over £350 million UK turnover (CMA guidance). Regulated sectors such as financial services also need change in control approval.
Share sale or asset sale: the decision that shapes the deal
Sellers usually prefer a share sale: one clean exit, the gain taxed in their hands and, potentially, Business Asset Disposal Relief. Buyers often prefer assets: they choose what to take and leave historic liabilities behind. The final answer depends on tax, consents, employees and the target's history. Our article on share purchase versus asset purchase goes deeper.
| Issue | Share sale | Asset sale |
|---|---|---|
| What transfers | The company, with all its assets and all its history and liabilities | Only the assets and liabilities the contract lists |
| Employees | Employer unchanged; TUPE normally does not apply | TUPE usually transfers assigned staff automatically |
| Contracts | Stay with the company, subject to change of control clauses | Need assignment or novation, often with counterparty consent |
| Buyer's transfer tax | 0.5% stamp duty or SDRT on the consideration | SDLT on land; VAT unless the sale is a transfer of a going concern |
| Seller's tax | Gain taxed on the individual; BADR may apply | Gain taxed in the company, then a second charge on extraction |
| Liability protection | Heavy reliance on warranties, indemnities and disclosure | Unwanted liabilities can be excluded by drafting |
| Typical documents | Share purchase agreement, disclosure letter, stock transfer form | Asset purchase agreement, assignments, property transfers, TUPE notices |
Hybrid structures are common: a pre-sale "hive-down" of the wanted business into a new subsidiary, followed by a sale of that subsidiary's shares. Hive-downs need careful tax analysis and still trigger TUPE at the hive-down stage.
Price mechanics and risk allocation
The headline price is rarely what the seller receives. Business sale solicitors London sellers rely on spend much of the negotiation on how price is adjusted and how risk is shared after completion.
Locked box or completion accounts
A locked box fixes the price by reference to a historic balance sheet, with the seller promising that no value ("leakage") leaves the business between the locked box date and completion. Completion accounts adjust the price after completion by reference to actual cash, debt and working capital on the completion date. Locked boxes give certainty and favour sellers; completion accounts give accuracy and favour buyers. See locked box or completion accounts.
Deferred consideration and earn-outs
Where buyer and seller disagree on value, part of the price may be deferred or linked to future performance. Earn-outs need precise accounting definitions, controls on how the buyer runs the business, information rights and a dispute mechanism, usually expert determination. Sellers taking deferred consideration are unsecured creditors of the buyer unless they negotiate escrow, a guarantee or security.
Warranties, indemnities and disclosure
Warranties are contractual statements about the business; a buyer claiming for breach must show loss. Indemnities are promises to pay pound for pound for a specific identified risk, such as a known tax exposure or litigation. Sellers limit exposure through disclosure against the warranties, financial caps, time limits for claims, de minimis thresholds and exclusions. Warranty and indemnity insurance can shift much of this risk to an insurer; see our guide to W&I insurance.
On most owner-managed sales, the disclosure letter does more to protect the seller than any cap in the share purchase agreement.
The business sale process, step by step
A typical private company sale that business sale solicitors London parties manage follows a predictable sequence, although the order flexes with auctions, regulated targets and cross-border buyers.
- Preparation and structuring. The seller tidies the corporate records, statutory registers, key contracts and title to IP; tax advisers confirm reliefs; the structure (shares, assets or hive-down) is chosen.
- Confidentiality and heads of terms. An NDA protects information; heads of terms record price, structure, conditions, timetable and exclusivity. Most terms are non-binding, but exclusivity, confidentiality and costs clauses usually bind.
- Due diligence. The buyer's lawyers, accountants and other advisers review the data room and raise enquiries. Findings feed into price, specific indemnities, conditions and the warranty package.
- Drafting and negotiation. The buyer's lawyers usually draft the share or asset purchase agreement; the seller's lawyers prepare the disclosure letter. Ancillary documents include board minutes, resignations, service agreements and any transitional services agreement.
- Clearances and consents. NSIA notification, CMA engagement, regulator change in control approvals, landlord consents and key customer consents are obtained, or made conditions to completion.
- Exchange and completion. Contracts may be signed and completed simultaneously, or signed first with completion after conditions are satisfied. Funds flow, share transfers or asset transfers are delivered, and Companies House filings follow.
- Post-completion. Price adjustments, earn-out reporting, stamp duty, registration of the new members, integration and any warranty claims follow over the agreed periods.
Documents and evidence to assemble
Good preparation shortens due diligence, which is why business sale solicitors London sellers instruct start here. It also reduces the number of specific indemnities a buyer demands. Before going to market, a seller should gather the following, and a buyer should expect to see them. Our legal due diligence checklist sets out the full list.
- Corporate: certificate of incorporation, articles, statutory registers, PSC register, shareholders' agreements, board and shareholder minutes, confirmation statements.
- Financial: statutory accounts, management accounts, debt and security documents, guarantees, grant or subsidy terms.
- Commercial: top customer and supplier contracts, especially change of control, exclusivity and termination clauses; standard terms of business.
- Employees: contracts and handbooks, pension arrangements, share incentive plans, disputes and tribunal claims, immigration sponsorship records.
- Property and assets: title documents, leases and landlord consents, asset registers, IT systems and licences.
- Intellectual property and data: registrations, assignments from founders and contractors, UK GDPR records, data breach history.
- Disputes and compliance: litigation, regulatory correspondence, anti-bribery, sanctions and anti-money-laundering procedures.
Check founder and contractor IP assignments before the sale starts. Software, brands and designs created by a founder before incorporation, or by freelancers without a written assignment, may not belong to the company at all. Fixing this mid-deal hands the buyer leverage on price.
Risks and common mistakes on business sales
Agreeing heads of terms before taking advice
Heads of terms are mostly non-binding, but they set the commercial baseline. A seller who agrees a headline price without specifying a locked box or completion accounts, the treatment of cash and debt, or the working capital target will struggle to reopen those points later because the buyer will treat them as settled.
Exclusivity clauses do bind, and a long exclusivity period removes competitive tension. Ask your business sale solicitors London advisers to review the heads, or draft them, before signature, and keep exclusivity short with clear termination rights if the buyer's timetable slips.
Ignoring change of control clauses in key contracts
Many customer, supplier, licence and finance agreements allow the counterparty to terminate or renegotiate on a change of control of the company. On a share sale these clauses are the main way third parties can disrupt the deal; on an asset sale, assignment restrictions play the same role. Identify these early, decide which consents are conditions to completion, and plan the approach to counterparties so that the deal does not leak and customers are not unsettled before it is announced.
Missing a mandatory NSIA notification
If the target carries on activities within the sensitive sectors defined in the NSIA regulations, an acquisition crossing the relevant control thresholds must be notified and approved before completion. A notifiable acquisition completed without approval is void, and there are civil and criminal sanctions. The sector definitions are technical: an apparently ordinary software, data or engineering business can fall within them. Run the analysis at the heads of terms stage, because the government's review period then drives the whole timetable. Our NSIA solicitors handle these assessments.
Overlooking TUPE information and consultation duties
On an asset sale, failing to inform and consult appropriate representatives exposes both seller and buyer to protective awards in the Employment Tribunal, and liability can pass to the buyer. Late or incomplete employee liability information gives the buyer a separate claim against the seller. Sellers should also be careful about pre-transfer dismissals at the buyer's request, which are likely to be automatically unfair. Build a TUPE plan into the timetable and allocate liabilities expressly through indemnities in the asset purchase agreement.
Treating the disclosure letter as an afterthought
A buyer cannot normally claim for breach of a warranty against matters fairly disclosed. General disclosure of the entire data room is resisted by most buyers, so specific disclosures against each warranty are what really protect the seller. Disclosures must be accurate, clear and sufficiently detailed for the buyer to understand the nature and scope of the issue. Leaving the disclosure letter until the last week is the most common cause of avoidable seller liability after completion.
Cross-border buyers and sellers
Many UK businesses are now bought by overseas acquirers, and many UK groups have subsidiaries abroad. Business sale solicitors London parties instruct must coordinate English law with local law wherever assets, shareholders or employees sit outside the UK.
Bangladesh. Bangladeshi buyers acquiring a UK business usually need to consider home-country exchange control approvals for outward investment, and should plan funding routes and timing accordingly. UK buyers of businesses with Bangladeshi subsidiaries, sourcing operations or branch offices need local due diligence on licences, land, labour and foreign exchange registration. TRW & Co's Dhaka headquarters works alongside the London team; see investing in Bangladesh from the UK.
EU, Gulf, Singapore and China. Local share or asset transfer formalities, works council rights in some EU states, foreign investment screening in the target's other jurisdictions and the buyer's own regulatory approvals all affect timing. The NSIA applies to acquirers of any nationality, including UK buyers, but the identity and connections of the acquirer are relevant to the government's risk assessment, so investor-side information should be prepared in advance. English law share purchase agreements with London-seated arbitration remain common where the parties are from different jurisdictions.
How TRW & Co's business sale solicitors in London help
As business sale solicitors London clients can call on at any stage, we act for sellers, buyers, management teams and investors on private company acquisitions and disposals. We draft, negotiate and complete the transaction and coordinate tax, employment and regulatory input. Where a dispute arises after completion, our commercial litigation team conducts the claim; where advocacy in the higher courts is required, we instruct specialist counsel.
Sale readiness
We review the corporate records, key contracts, IP chain of title and employment documents before marketing. We fix defects early and help assemble a structured data room, so diligence is faster and the seller controls the narrative.
Structuring and heads of terms
We work with tax advisers to compare share, asset and hive-down routes, then draft or review heads of terms covering price mechanism, conditions, exclusivity and timetable.
Due diligence
For buyers, we run legal due diligence and report by risk, linking each finding to price, an indemnity, a condition or a warranty. For sellers, we manage enquiries and the disclosure exercise.
Transaction documents
We draft and negotiate the share or asset purchase agreement, disclosure letter, ancillary agreements, TUPE documentation, board minutes and completion deliverables.
Clearances and consents
We assess NSIA, CMA and sector regulator requirements, prepare notifications, and manage landlord, lender and counterparty consents within the completion timetable.
Post-completion
We advise on completion accounts disputes, earn-out reporting, warranty claims and restrictive covenant enforcement, coordinating with our disputes lawyers if proceedings are needed.
For a wider view of our work, see our practices, or contact our London office to discuss a proposed sale or purchase.
Checklist for owners, boards and acquirers
- Decide early whether a share sale, asset sale or hive-down is realistic, with tax modelling for both sides.
- Confirm whether Business Asset Disposal Relief is available, at which rate, and whether the timing of exchange and completion matters.
- Check the articles and any shareholders' agreement for pre-emption, drag and tag rights and transfer restrictions.
- List contracts with change of control or assignment restrictions and plan the consent strategy.
- Run the NSIA and merger control analysis before agreeing a timetable.
- On an asset sale, map TUPE obligations and the employee liability information timetable.
- Clean up IP ownership, data protection records and statutory registers before buyers see them.
- Agree the price mechanism, definitions of cash, debt and working capital, and any earn-out terms in the heads.
- Prepare specific disclosures against warranties rather than relying on general disclosure.
- Verify the identity of incoming directors and PSCs with Companies House ahead of completion.
Every sale is different. Business sale solicitors London clients engage at the planning stage usually save more in price protection than they cost. For related guidance see Capital Gains Tax on selling a business and employee ownership trusts.
Frequently asked questions
01Should I sell my company's shares or its assets?
Most sellers prefer a share sale because the proceeds come directly to them and Business Asset Disposal Relief may reduce the tax. Buyers often prefer assets because they can leave historic liabilities behind and choose what they take. The decision turns on tax for both sides, whether key contracts can be transferred, whether the company has historic risks the buyer will not accept, and employee issues under TUPE. Hybrid structures such as a hive-down can bridge the gap. Model both routes with lawyers and tax advisers before agreeing heads of terms.
02How long does it take to sell a business in England?
Timing depends on preparation, the buyer's diligence and the clearances required. A well-prepared private sale to a domestic buyer with no regulatory filings can move from heads of terms to completion considerably faster than a deal needing NSIA approval, CMA engagement or a regulator's change in control consent, each of which runs on its own statutory or administrative timetable. Sellers who assemble the data room, fix IP and records issues and prepare disclosures before marketing typically shorten the process and keep negotiating leverage.
03What is the Business Asset Disposal Relief rate in 2026?
For qualifying disposals made on or after 6 April 2026, Business Asset Disposal Relief gives a Capital Gains Tax rate of 18%, up from 14% for disposals between 6 April 2025 and 5 April 2026 and 10% before that. The relief is capped at £1 million of qualifying gains over an individual's lifetime. For shares, the company must have been your personal company and you must have been an officer or employee for at least two years before the sale. Confirm eligibility with a tax adviser before signing.
04Do employees automatically transfer when a business is sold?
On an asset sale of an undertaking, TUPE usually transfers employees assigned to the business to the buyer automatically, on their existing terms and with continuity of employment. Dismissals because of the transfer are automatically unfair unless there is an economic, technical or organisational reason entailing changes in the workforce. On a share sale TUPE does not normally apply because the employing company stays the same, although contractual and collective consultation issues can still arise if the buyer plans changes.
05What is the difference between a warranty and an indemnity?
A warranty is a contractual statement of fact about the business. If it is untrue, the buyer must prove that the breach reduced the value of what it bought, and the seller can limit exposure by disclosing known issues against the warranty. An indemnity is a promise to reimburse a specific loss pound for pound, usually for a known risk such as a tax liability or pending claim, and disclosure does not normally qualify it. Buyers seek indemnities for identified risks; sellers resist them or negotiate tight caps.
06Does my deal need approval under the National Security and Investment Act?
Mandatory notification applies where an acquirer gains control above set thresholds of shares or votes in an entity carrying on activities within the specified sensitive sectors, such as defence, energy, communications, data infrastructure and certain advanced technologies. Completing a notifiable acquisition without approval makes it void. The government can also call in non-notified deals, including asset acquisitions. Because the sector definitions are technical and are being revised, check the current regulations for each target early in the deal.
07Can a buyer withdraw after signing heads of terms?
Usually yes. Heads of terms are normally expressed to be non-binding on price and structure, so either side can walk away until the sale agreement is signed. Specific clauses such as exclusivity, confidentiality, costs and governing law are typically binding. A buyer who breaches an exclusivity undertaking by negotiating elsewhere, or misuses confidential information, may be liable. Sellers can reduce the risk of a late withdrawal through short exclusivity periods, early diligence and clear conditions.
Sources and official materials
- Business Asset Disposal Relief — HMRC guidance on rates, eligibility and the lifetime limit
- Transfer of Undertakings (Protection of Employment) Regulations 2006 — TUPE: automatic transfer, information and consultation
- Employee liability information (Acas) — What the seller must provide and when
- National Security and Investment Act 2021 — Mandatory notification and call-in powers
- Mergers: how to notify the CMA of a merger — CMA merger control process and guidance
- Tax when you buy shares — Stamp duty and SDRT on share purchases
- Transfer a business as a going concern and VAT (Notice 700/9) — VAT treatment of asset sales
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.