Harper James is a UK full-service commercial law firm advising start-ups, scale-ups and established companies on the laws of England and Wales, including corporate and M&A matters. A buyer should first define the commercial objective, target business, proposed timetable, funding arrangements and acceptable risk.
The main structural choice is between a share purchase and an asset purchase. In a share purchase, the buyer acquires the company and its assets, liabilities, contracts, employees and historic obligations. In an asset purchase, the buyer selects the assets and liabilities being transferred. This distinction affects consent requirements, employee transfers, contracts, intellectual property, property and regulatory approvals.
Due diligence tests whether the target matches the information provided by the seller. The review normally covers corporate records, accounts, material contracts, finance, property, employment, intellectual property, data protection, disputes, regulatory matters and insurance. A buyer should organise requests through a data room and record issues by subject, financial effect, urgency and proposed solution.
The buyer then assesses whether an issue requires a price adjustment, a specific indemnity, a warranty, a contractual condition or a change to the transaction structure. The seller usually provides information through a disclosure letter. A disclosure that is sufficiently clear can limit the buyer’s ability to claim for a breach of warranty, so the buyer should check both the disclosure letter and the supporting documents.
Early negotiations often produce a non-binding term sheet covering price, structure, exclusivity, conditions and the allocation of transaction costs. The main document is usually a share purchase agreement or an asset purchase agreement. It sets out the assets or shares being transferred, consideration, conditions, warranties, indemnities, limitations on liability, restrictive covenants and completion arrangements.
The parties should identify required third-party consents, lender approvals, regulatory clearances and key contract assignments before signing. If employees transfer as part of an asset purchase or business transfer, the Transfer of Undertakings (Protection of Employment) Regulations 2006, commonly known as TUPE, can impose information and consultation duties. Acquisition finance documents, shareholder approvals and updates to Companies House records also form part of the completion plan where relevant.
Completion takes place when the agreed conditions are satisfied and the parties exchange the required documents and consideration. The completion checklist should identify each deliverable, responsible person, deadline and dependency. Typical items include executed transfer documents, board minutes, stock transfer forms, resignations and appointments, payment evidence, releases of security and delivery of records.
After completion, the buyer should implement the integration plan rather than treating the transaction as finished. This includes confirming control of bank accounts and systems, communicating with employees and customers, transferring operational records, reviewing inherited contracts and monitoring warranty or indemnity claims. A clear division between legal, finance, human resources, technology and operational tasks reduces the risk of missed obligations.