Buying a business: The legal process – After completion
In the latest of our series of briefings about how to buy a business, we set out what happens after completion.
The handover period immediately after completion is a crucial phase. You will need to focus on retaining existing customers, motivating staff and integrating the target business into any existing business you are operating.
Also at this stage, if the deal involved a share sale, there may be an accounting exercise after completion, which involves the preparation of accounts for the company as at the completion date. If the parties agreed a target value for the next assets of the company, this exercise may result in a post-completion increase, or reduction, in the purchase price.
Discovering problems in the business
If you discover problems in the business, which existed at the time of the sale but which were not disclosed to you in the sale process, you may be able to bring a claim for compensation for breach of the warranties and indemnities in the share purchase agreement. Your right to do so will depend on what the transaction documents say about time limits and financial limits on claims, and whether or not the issue in question was adequately disclosed in the disclosure letter and supporting documents.
Competition from the seller
Alternatively, if you discover that the seller has set up a competing business in the same sector, you may be able to sue for compensation for breach of the restrictive covenants in the purchase agreement.
In either case, you will need the right legal advice to guide you about your rights and how to bring a claim against the seller.
Click here to read the full briefing series: Buying a business.
If you are looking to sell your business, please see our ‘Selling a business’ series.
For more information or guidance, please contact:
Partner and Head of M&A
T. 020 7227 7441
This briefing is for guidance purposes only. RadcliffesLeBrasseur accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.