Business Purchase
Business Purchase
The sale of commercial property typically means selling office premises, retail units or shops, manufacturing factories and industrial units as well as industrial or development land. It usually involves selling the freehold of the premises or a very long lease. You may be selling the property as an individual, a partnership, a company or possibly as a self investment pension fund (sometimes called a SIPP).
In most circumstances the sale of a commercial property will be a business transaction and, like all business transactions, it is important to ensure you secure the right price.
Buying a business can be a huge financial and emotional commitment. It can also be a complex and demanding process and to ensure you make the best decision, get the best deal and comply with all the business red-tape it is advisable to get professional help on board early. A solicitor specializing in business law can assist in the initial research and valuation phase, as well as later handling the offer, negotiation, due diligence and contract phases.
Once an offer has been made and accepted, the next step is to negotiate the firm purchase offer, which is called a Heads of Terms agreement, or Heads of Agreement. This document sets out the main points of the sale and is not usually legally binding – except for issues of exclusivity and confidentiality.
The Heads of Agreement should cover:
- what is included in the sale
- the price and payment structure
- the terms of the period of exclusivity to complete the sale, including that period’s termination
- preconditions for the sale
Other legally-binding agreements include the seller’s disclosure letter limiting his liabilities under the warranties, and any agreements from the seller and buyer to pay each other’s costs in certain circumstances if the sale falls through.
Your lawyer will be responsible for checking these documents and liaising with the other party. Once the Heads of Agreement is signed, they will then carry out thorough searches into the business records, the due diligence phase. During this period, negotiations continue with the seller on drafting the final sale agreement, or sale purchase contract.
Your lawyer will also oversee the completion of the deal, ensuring that the following conditions are met:
- verification of financial statements
- transfer of leases
- transfer of contracts/licences
- transfer of finance
- transfer of existing or new VAT registration
Find a Corporate and Business Solicitor locally or nationally from a range of fixed legal cost options and select a quality Solicitor to save you money – wigster.com “Compare Solicitors, Compare Prices”
