You are currently viewing <strong>How to Buy a Business in the UK</strong>

How to Buy a Business in the UK

The United Kingdom is the epitome of a highly developed and globalized country. The government in the UK has rightly supported small and medium-scale businesses. Thus, making it a promising investment destination among other EU countries.  

Buying a business in the UK has many benefits. You have the company with all processes and guidelines established. The company must already be holding some market share and have its customer base with a revenue range, etc. Isn’t it a cakewalk?

In What Ways Can You Buy a Business in the UK?

In the UK, there are two major ways in which you can buy a business. 

  1. Purchase of shares
    1. This is an indirect way of buying a business.
    2. In this type, the buyer buys the shares of the parent company.
    3. For this, the buyer had to prepare a share purchase agreement and other required documents. 
  1. Purchase as going-concern
    1. This is a direct way of buying a business.
    2. In this type, the buyer buys or acquires a business along with its assets and liabilities.

Steps to Buy a UK Business

  1. Conduct deep analysis: The buyer has to perform a detailed analysis of the target company’s business, profitability, etc.
  2. Seek expert or professional advice: The buyer has to get word from legal and industry experts on negotiation terms, valuation, and purchase process.
  3. Select a financing option: Be it banking or any other financing option in the UK, they expect personal or non-business collateral to offer a loan. The only advantage is they can lend either a maximum percentage or 100% share. 
  4. Negotiate & Sale: Initially, negotiate the sale terms and sale price. Later, upon mutual agreement, execute the purchase. 

Buying a Private Company in the UK

Buying a private company in the UK involves three major parties: the buyer, the seller, and the legal team. 

The initial process of the purchase begins with,

  • Letters of intent: This includes the commercials, obligations, and a perfect road map of the buying process. 
  • Confidentiality or NDA agreement: This provides the buyer with all the confidential information of the target company.

Then, the buyer drafts an exclusivity agreement. It includes information like,

  • The business’s strengths, weaknesses, opportunities, threats
  • Finance and accounts, 
  • Assets and liabilities 
  • Potential near risks, etc.

It gets validated by the buyer’s legal authorities, lawyers, and accountants. 

Solely, once the buyer is satisfied with the purchase post these validations and analysis, the legal purchase agreement gets executed. Followed by the sale, title change, and other transitions occur. 

GBCorp Helps You Buy a Business in the UK 

GBCORP bridges the gap between the buyer and seller companies by doing all the heavy lifting for them.

Leave a Reply