Buying or Selling your business or company can be a time-consuming and stressful process. Shares can be sold by the seller simply executing a stock transfer form in favour of the buyer. However, since a buyer will take on all liabilities (including contractual, employee, tax etc) then this is obviously not a good idea from a buyer's perspective!
Therefore a buyer will invariably insist on undertaking "due diligence" and that the sellers should sign up to a sale and purchase agreement.
Completing careful and structured due diligence helps reduce the chances of any nasty surprises coming out of the woodwork after completion. Our lawyers can really add value in these areas since they can help pinpoint the problem areas and know what questions should be asked.
The sale and purchase agreement can be very lengthy and the front end mainly sets out the terms of the transaction (the price and how it is paid etc). There will be a number of schedules which will no doubt include both "warranties" and "indemnities". Negotiating warranties and indemnities can form a significant part of a transaction and this is where it is important that the lawyer involved understands the business. The more detailed knowledge a lawyer has, the easier it is to limit the seller's liability under the agreement.
Negotiating a sale and purchase agreement will be about allocating risk. Obviously a buyer will want to place as much as possible on the shoulders of the seller and a seller will want to avoid this. Our lawyers are there to help steer you through this process and negotiate a sensible compromise which is beneficial to all parties.
Importantly, since Stephens Scown is a full service commercial firm, the team has access to the firm's other specialists (most importantly employment and commercial property) to ensure that all aspects of a transaction are covered.
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