Understanding contracts when buying or selling a business

Checklist before you sign a sales contract


Before you sign, you need to double-check the details written into the final contract and its accompanying documents. Once you have signed, there is a further list of tasks you need to do before you can complete the sale.

Checklist for selling or buying a business

Before you sign a contract, you should:

  • review your aims and how well this contract meets them
  • make sure all the agreements made during the negotiation are included in the contract
  • make sure there are no vaguely worded provisions, exclusions or limitations in the contract which could give rise to problems later
  • if you are buying, ensure you have non-compete agreements in place
  • check the financial and tax details again with your financial adviser
  • check your obligations and the wording of the contract and other agreements again with your solicitor
  • ensure all the necessary documentation and signatories are present at the signing session
  • establish a schedule of tasks for completing the sale, making the handover, continuing the business and meeting future obligations
  • make sure you have copies of all negotiated agreements kept in a safe place
  • have informed and consulted affected employees in compliance with the Transfer of Undertakings (Protection of Employment) (TUPE) regulations

After you have signed a contract, make sure that:

  • all others who need to sign have signed the relevant documents
  • your solicitor has all the original documents you need to keep
  • the buyer's solicitor has copies of all the documents and will present a digital version to both the buyer and seller
  • the financial agreements are put into effect
  • the buyer's solicitor makes the change of ownership return to Companies House
  • in asset and goodwill deals, the seller deregisters and the buyer registers for VAT
  • the seller - and the buyer if applicable - continues to inform and consult affected employees in compliance with TUPE as necessary
  • both sides are ready for the handover and for informing clients, suppliers, etc
  • the business operates smoothly up to and after the sale is completed