How to Buy a Business

Buying another business can be an excellent opportunity to strength your market position, diversify into new markets and accelerate your growth.

Buying a business can be a complex process and our Corporate Team is well placed to advise you at every step of the process to make it as smooth as possible. The process of acquiring another business involves a number of steps.

1. Research

When choosing a business, you will need to research not just the target business, but the relevant sector and market conditions. Working with professionals, including business advisers, accountants and lawyers will help you do this.

2. Non-disclosure agreements

Once you have found a business and shown an interest in it, the business will likely require you to enter into a non-disclosure agreement. Throughout the purchase process, you will be privy to confidential information about the business which the business will want to remain confidential should the sale fall through.

3. Financing

Once you have had the business valued, you will need to consider how you are going to fund the purchase. There are several possible sources of finance, which include your own funds, bank finance or private equity investment. 

Our experienced banking and finance team are able to provide specialist advice on funding your purchase. 

4. Structure

A key consideration is how the transaction will be structured. Will you be purchasing simply the assets of the target business or its entire shareholding?

If it is a share purchase, you will need to consider whether you want the business you are acquiring to be held within your current corporate group or if it will be independent.

5. Due Diligence

The next step in the process is making a formal offer to purchase the business. Due diligence will then need to be carried out to give you a realistic picture of the business, its current performance and how it is likely to perform in future.

Our expert lawyers will look at the information disclosed by the seller, which will include details such as the company’s assets, liabilities, accounts and employees and help you to resolve any issues that are uncovered in this process.

6. Negotiations

Any issues arising from the due diligence process can be used to aid negotiations between you and the seller as to the price and the terms of the purchase. During this negotiations, we will work on your behalf to ensure that you we achieve the best possible deal for you.

7. Completing the purchase

Once negotiations have concluded and legal documents have been agreed, you will be ready to complete your purchase and move forward with your new business. Following completion, you may wish to consider restructuring your corporate group. 

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Herrington Carmichael LLP’s lawyers are ‘as sharp with legal knowledge as they are with client care’. For example, practice head Yavan Brar has ‘market-leading understanding of how the law practically needs to work for clients’; his recent workload includes global expansions, corporate restructurings, share acquisitions and selling companies for clients in industries such as hospitality and technology.

Legal 500, 2017

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Herrington Carmichael offers legal advice to UK and International businesses as well as individuals and families. Rated as a ‘Leading Firm 2024’ by the legal directory Legal 500 and listed in The Times ‘Best Law Firms 2023 & 2024’. Herrington Carmichael has offices in London, Farnborough, Reading, and Ascot.

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