These notes are intended to assist you in reading and understanding the sale of your business. This is not a comprehensive list of issues that might arise. It may look a little daunting but we are here to help you at every stage and your Solicitor is there to guide you through the legalities and ensure that the transaction is executed in a legal manner.


Usually you will be selling the goodwill and assets of the business as well as the premises or the lease of the premises if you are a tenant.


The assets usually comprise the equipment used by you in the business. You will need to provide a list of these but it is important not to include any equipment that is loaned to you, leased or on hire purchase as any such items are not yours to sell. It is important to identify those and to produce copies of any agreements relating to them as they may be capable of transfer to the buyer.

It is also important to ensure that the buyer is aware of any items that may not be fit for purpose or which may be coming towards the end of their useful life. It is also important to have any portable electrical equipment tested and to produce a PAT certificate to confirm that they comply with all relevant legislation. Any warranties or guarantees should also be provided.

Stock is generally not included in the assets but as a separate item. It is usually the case that this is valued on or near to the completion date as it can obviously vary from time to time. It may be a good idea to start to compile a stock list and adjust it as it changes and to have a running total of its value. Any failure to agree on stock values can result in it being valued by an independent valuer though that can be time consuming and costly.


This is the value of the business as a going concern. It is often calculated by reference to the profits but that is not always a true reflection. It will generally include things such as the business name and any trademarks or patents. It may include things such as domain names and social media accounts. It is important to check that a third party does not own the intellectual property rights in things such as these as if they do you may need their consent to transfer the benefit to the buyer.

Goodwill may also include documentation relating to the business such as customer/client records, intellectual property, passwords etc.


If you own the property you may be selling it or granting a lease to the buyer. If you are a tenant, you will need consent to transfer the lease from your landlord. The transaction can be made conditional upon getting that though, often buyers want to wait until it has been obtained before entering into the contract. Landlords should deal with a request for licence to assign (consent to transfer) promptly but they do not always do so. A request to assign can only be refused on reasonable grounds and can be challenged in the courts.

Occasionally buyers ask for a new lease. That can be good for you as it means that you won’t be required to enter into an authorised guarantee agreement (please check with your Solicitor about this as it can have important repercussions for you). The downside to this approach to the business property is that the landlord is not required to act reasonably nor within any reasonable timescale.

You will be responsible for the landlord’s solicitors’ (and sometimes surveyors’) costs. You may have negotiated that the buyer pays some or all of these, but the landlord’s solicitor will require an undertaking from your solicitor to pay them.

The buyer’s solicitors will expect to be provided with replies to commercial property standard enquiries (CPSE). These are an industry standard suite of enquiry forms which cover most eventualities.

You will also need to provide a valid energy performance certificate (EPC). If you do not have one you will need to arrange to have one prepared. It is actually a crime to grant or transfer a lease without one!

Other documents that you should expect to have to supply are: the buildings insurance schedule; the latest business rates demand; recent utility bills; an asbestos report (unless the property is relatively new); any PRS/PPL licence; any premises licences (alcohol or special treatments if applicable); copies of any relevant planning permissions and building regulations consent; any permissions for alterations etc issued by the landlord and copies of any service charge demands and accounts (usually the last 3 years).


Any employed staff will transfer with the sale. Details of their contracts will be provided to the buyer’s solicitor. You are advised to make the staff aware of the proposed sale. Occasionally sellers like to keep it confidential and it can lead to problems especially when staff are only told on completion. The Transfer of Undertakings (Protection of Employment) Regulations 2006 referred to as TUPE impose certain requirements to consult especially if changes to the terms and conditions are possible. You should speak to your HR adviser or ACAS to check the current requirements.

You cannot dismiss staff because the buyer does not want them without leaving yourself open to proceedings for unfair dismissal.

You should have documents relating to the employment of all staff (permanent or part-time) as well as any genuinely self-employed contractors available for the buyer to inspect. This includes contracts of employment, PAYE, Health and Safety handbooks and risk assessments, accident books, pensions.

Usually you will be responsible for pay up to completion including any unused holiday allowances and tax.

Beware of calling any staff ‘self-employed’ unless they are genuinely self-employed contractors. HMRC have their own test of whether somebody is genuinely self-employed and if your staff fail that test you may be liable for National Insurance contributions.


Most contracts cover all of the things expected to be relevant though buyers’ solicitors usually want amendments.

The contract will split the agreed price between goodwill, assets, property (and stock if included in the agreed price). It is important that you speak to your accountant about how that is done as there can be tax consequences for you if the total price is not correctly split. You will sometimes find that a buyer is advised to seek a different apportionment.

The contract will also deal with VAT. If you are VAT registered, you will need to charge VAT on the sale price unless the buyer is VAT registered and intends to carry on the business in the same way. VAT will not be charged in respect of the lease unless the landlord (or you if you’re selling it or granting a lease) has specifically opted to charge VAT by notifying HMRC of the exercise of the option in which case a copy of the HMRC acknowledgment will be required.

The contract will agree a completion date. Sometimes exchange of contracts and completion occur at the same time though that can create difficulties for you in arranging to cancel supply contracts etc

The contract will contain a list of the assets being sold and a list of the employees and details of the property.

On exchange of contracts (if not simultaneous with completion) the buyer usually pays a deposit (usually 10%) which will be held pending completion. All or part of this may have been paid by the buyer to us or yourself already.


On completion the balance of the purchase price is paid and documents assigning the goodwill and acknowledging receipt of payment for the assets are handed over together with documents relating to the sale of the property or the assignment of the lease. These will have been prepared and signed between exchange and completion.

You will hand over keys, passwords and documents relating to the business. You may need to agree the value of any stock on the day. You will need to cancel supply contracts including water, electricity, gas, telephones, card-machines etc and you will need to notify the council business rates department.

Some outgoings may be apportioned on completion e.g. pre-paid vouchers, gift cards, licence fees etc

We hope these notes will give you some idea of what is involved in a business sale but please don’t panic as we are there to help every step of the way.

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