In a business & asset sale, the buyer acquires the business and assets (both tangible and intangible), together with select liabilities of a company. This is as opposed to a share sale, where the buyer acquires the shares of the company that owns the business and assets. If you have decided (or have been advised) that a business & asset sale is the best way to structure the sale of your business, it is important that you prepare sufficiently.

This blog outlines five steps that we recommend you take if you are selling the business & assets of your company.


The sale of a company can, depending on the size of the transaction, take several months with numerous elements that will need to be considered. The buyer will require sight of certain documents and records before finalising any purchase, and it is therefore in your best interests to ensure that your record keeping is in order early on to ensure, as far as possible, a smooth due diligence process. These can include (depending on the nature of the business) property leases/titles, employment contracts, customer & supplier agreements and permits.

Appointing experienced business, legal and tax professional advisers at an early stage is the most prudent way to ensure that the sales process runs as efficiently as possible.


Corporate finance advisors should be consulted when you set about valuing your business & assets. There are many different factors that must be considered in the valuation, for example, the ability to novate key customer & supplier contracts to the buyer. It is worth noting that the things to consider are not necessarily analogous of those of a share sale, emphasising that it is important to get professional guidance tailored to your business.

Depending on the circumstances of the seller and/or business, there may be ways to make changes or adjustments to the business first which will increase its potential value. These changes may occur over a relatively long period of time prior to the sale or entering into any preliminary agreements. Regardless of any changes, it is imperative that the right time to sell is identified, so it is worth consulting trusted advisors at the beginning of the process.


The importance of confidentiality throughout the process should not be underestimated, particularly at the beginning. Disclosing any details of the transaction too early can have unintended adverse effects. For example, if a proposed sale is disclosed to the affected employees, this may create concerns regarding their job security, which could potentially have an impact on the deal process.

Potential buyers should be asked to sign confidentiality agreements (also known as non-disclosure agreements) before any information is disclosed, so that sensitive information in relation to the business & assets is protected.

Deal structure/Heads of Terms

It is a good idea to consider the structure of the deal early on. Your corporate finance advisor (and legal advisor, where appropriate) is best placed to advise you on this. One of the first things that is likely to be discussed is whether a business & asset sale, rather than a share sale, is right for you. After this has been established, there are a number of different issues that need to be considered and it is common for the buyer and seller to enter into a form of preliminary agreement (often referred to as "heads of terms") to capture some of the key terms (both commercial and legal) of the transaction.

These heads of terms usually set out the basis of the offer from the buyer as well as some of the key legal terms to be included within the legal documentation which will ultimately be required for the sale (e.g. warranty cover, caps on liability, how employees are to be dealt with etc). Save in relation to exclusivity and/or confidentiality, most of the provisions of the heads of terms will not be legally binding but are intended to give the parties some comfort around the structure of the deal before moving to the next stage of the process. It is important that the document is clearly drafted to (i) ensure both parties have a clear understanding of the outline terms of the deal, and (ii) reduce the risk of the buyer trying to renegotiate key aspects of the deal at a later date, which could make the process more time consuming and expensive.


Buyers, when considering the purchase of your business & assets, will be wary of any obstacles to obtaining the third-party consents necessary for them to take over ownership of the assets. A prudent seller will explore whether the consents within material agreements are obtainable, so that issues do not arise unexpectedly during the diligence process. These consents can include:

  • Lenders – if the seller has any secured loans in place with a bank, the bank's consent will be required for the sale of any assets which are covered by their security. The earlier that these conversations with the bank take place, the better.
  • Landlords – if your business operates out of a leased premises and the buyer wishes to continue to use the premises, the lease will need to be assigned to the buyer and this will (typically) require the consent of the landlord. As with the bank, the earlier that these conversations take place with the landlord the better as this is the type of issue that can delay completion of the transaction.
  • Customers & Suppliers – if the sale of your business includes the assignation/novation of certain key agreements (both customer and supplier) to the buyer, the terms of those agreements will need to be checked thoroughly to establish what can and cannot be done without the consent of the relevant contractual third party. If the buyer requires the formal assignation or novation of a key agreement, the seller will need to arrange this with the relevant third party in advance of completion.

The above is not an exhaustive list and your legal advisor will be able to give you tailored advice on the various consents which may be required for the sale of your business & assets.

How Brodies can help

The Brodies corporate and commercial team has significant experience of advising on both buy and sell side transactions. We draw on the expertise of specialists from across our firm and work in close collaboration with our tax, real estate, employment, banking, pensions, IP/IT and other colleagues to deliver a complete service.

If you have any questions in relation to the matters discussed in this blog or wish advice in relation to your business please get in touch with your usual Brodies contact, who would be happy to assist.


David Millar


Susannah Scott