When it comes to selling a business, understanding the legal requirements and the process can be a challenge. But that’s where we come in. We’re Rubric Law, a boutique corporate law firm, dedicated to making the intricate world of corporate law feel approachable.
When someone is considering selling their business, they’ll need the help of a knowledgeable solicitor to ensure everything runs smoothly.
This article breaks down the role of a solicitor when selling a client’s business.
Heads of Terms
When selling a business, a solicitor plays a pivotal role in negotiating the Heads of Terms, a crucial early document that sets the foundation for the transaction. They work to clarify and agree upon the major aspects of the sale, such as the price, structure, and key conditions, ensuring the seller’s interests are well represented. Essentially, they’re an expert negotiator, ensuring this initial agreement is fair and beneficial, to pave the way for a smoother sale process.
Solicitors coordinate the legal aspects of the due diligence process. They thoroughly examine the business, looking over documents, contracts, finances, and more, to ensure everything is in order and there are no hidden issues. This step is crucial as it helps avoid any future surprises and gives the buyer confidence in the purchase.
Drafting the Sale and Purchase Agreement
When it comes to selling a business, a solicitor steps in to craft a sale and purchase agreement that outlines all the vital details about the sale. They take care of putting together the terms and conditions of the sale, ensuring it covers everything from price and payment to the responsibilities and obligations of all parties involved. Their role is to simplify the legal complexities, making sure the agreement is fair, comprehensive, and easy to understand, leaving no room for unwanted surprises.
Finally, the solicitor will oversee the completion of the sale. They’ll make sure all paperwork is properly filled out and signed, oversee the transfer of funds, and confirm that the ownership change complies with all legal requirements. Essentially, they make sure all the ‘i’s are dotted and ‘t’s are crossed, ensuring a smooth and stress-free conclusion to the sale.
Following the sale, the solicitor’s role doesn’t end immediately. They tie up any loose ends, like ensuring all relevant documents are correctly lodged with regulatory bodies, and they remain available to address any questions or concerns their client might have about the sale.
What happens to employees in a trade and asset sale?
The Transfer of Undertakings (Protection of Employment) regulations, more commonly known as TUPE, is like a superhero for employees during a business sale.
Basically, if you’re selling your business, TUPE makes sure your employees’ rights are preserved and transferred to the new owner. This means their jobs, terms of employment, and any existing benefits go with them, making sure the sale doesn’t negatively impact their working lives.
What happens to the premises when a business is sold?
What happens to the business premises when a business is sold can vary greatly and depends largely on whether the premises are owned or leased by the business, and the terms of the sale agreement.
Here are a few possible scenarios:
If the business owns the premises: The premises can either be included in the sale or not. If included, the new owner would take over the property along with the business. If not included, the business seller might continue to own the property and lease it to the new owner, or the new owner would have to find a new location for the business.
If the business leases the premises: The lease might be transferred to the new owner as part of the sale. This usually requires the landlord’s approval. If the lease cannot be transferred, the new owner will need to negotiate a new lease with the landlord or find a new location.
In any scenario, the details about the premises should be clearly stated in the terms of the sale and purchase agreement.
Rubric Law your trusted legal partners
We know that selling a business isn’t just a legal process – it’s a personal journey. That’s why we keep our clients updated and comfortable throughout, assuring them that they’re in safe hands. After all, we’re here to add value, provide specialist knowledge, and reassure all involved in the transaction that we are taking care of the legal side of things.
Remember, in the journey of business sales, a skilled solicitor is a trusted ally, guide, and protector. They navigate the complexities of corporate law, ensuring the business sale process is smooth, stress-free, and compliant. And that’s the key to a successful business sale.
If you’re thinking of selling your business or if you’re looking for a referral partner for your clients, please feel free to get in touch.
0117 435 4350