Sale & Purchase of Businesses

The art of business sales is in the contract drafting: carefully considering all contingencies. The science is in the implementation: stewarding the deal through to successful completion.

Our talented professionals are experts in leveraging their knowledge to ensure you derive maximum benefit from your transaction. You can expect the same devotion from the lawyer appointed for the job as you apply in the business.

Buy shares or just the business?

Transfer of leasehold business

The sale of a business relates to the sale of unencumbered business assets rather than shares in a company. All debts of the business remain with the seller as do pre-sale liabilities and taxation issues. Business assets usually include goodwill, plant & equipment, lease of the premises, fixtures and fittings, stock and intellectual property.
Staff can transfer to employment by the buyer without detriment to their employment benefits, or their contracts can be terminated by the seller at the date of completion of the sale.

Lease and supply contracts need to be assigned (with the approval of the landlord or customer as the case may be). Business names and related collateral are also transferred.

Transfer of shares in the company

This involves a sale of the company “warts & all” to the buyer, where one of the assets is the business itself. The buyer acquires the company including all of its assets and all of its liabilities. It therefore requires a buyer to be satisfied that the company is ‘clean’. The buyer must be satisfied with the following:

  • Any potential for customer or supplier disputes
  • Adverse taxation liability
  • Latent liabilities
  • Incomplete regulatory compliance

Is it better to sell or buy the business or the shares?

The documentation required for the two different methods of asset transfer is different, though the legal costs for a buyer and seller are generally much the same in each case. From a taxation perspective, every case should be considered individually in order to determine the best means of acquisition or disposal.
By far, the majority of business sales are accomplished by the sale of the business rather than the shares.


  • The buyer gets the benefit of government approvals or licences that are not transferable.
  • Leases and supply contracts don’t require formal assignment (although you will still need approval from the landlord in the case of leases).

Downsides –

Latent liabilities and customer or supplier disputes are inherited even if they were unforeseen.

  • Because all of these features are difficult or impossible to independently investigate, many buyers are not prepared to entertain this means of acquisition.

The capital gains tax and income tax payable on a share sale will be different to that payable on the sale of the business by itself.

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