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Buying a business

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Jen Goodwin

Head of Corporate & Associate Director

Commercial law

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Joanna Convey


Commercial law

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Are you considering buying a business?

What is the process?

Buying a business is not something you will undertake every day and there are many considerations to be made. Should you buy shares or assets? What is the difference? How will the deal be structured or financed?

As a buyer, you may be asked to sign a confidentiality agreement before you even begin to enter into negotiations, requiring you to keep confidential all information regarding the target business that will be disclosed to you. It is also increasingly common for non-binding heads of terms or a letter of intent to be signed.

Once the heads of terms are agreed due diligence will be undertaken by you and your advisors. This is the information gathering process to find out as much information as possible about the target company early in the transaction negotiations.

Legal due diligence will often involve a lengthy questionnaire prepared by us requesting information from the seller. We will then prepare a legal due diligence report for you, highlighting any potential legal issues that will be of importance to you. If you become aware of any issues that are important to you during the due diligence process you can:

  • abort the deal
  • negotiate a price reduction, or
  • seek specific protections in the acquisition agreement.

Following completion of due diligence, the formal sale and purchase agreement will be prepared and negotiated. This agreement will include warranties, indemnities and restrictive covenants to be given by the seller in respect of the business being acquired. There may also be other agreements if property is being transferred and a tax indemnity in respect of potential tax liabilities if shares are being acquired.

You can buy either the shares of the company that owns the target business or simply buy the assets that make up that business:

  • in a share purchase, you will buy the whole company (including liabilities that it may not know about); or
  • in an asset (or business) purchase, you can choose the assets that you want to buy. This provides more flexibility, but it can be complicated to identify and transfer specific assets.

We advise that if you are thinking about acquiring a business then you get in touch at an early stage to obtain legal advice. The corporate team at Myers & Co have many years experience in dealing with corporate acquisitions and are happy to speak to you at any time.

Based in Stoke-on-Trent, Staffordshire, our corporate lawyers have a reputation for providing expert advice.  For further advice contact Myers & Co Solicitors on 01782 577000.

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