Leaflets

What is Commercial Conveyancing ?

Buying a Business

If you are considering buying a business it would be advisable to seek legal advice from a solicitor to guide you through the  process.

Property

Is the business situated in a rented property or a property owned by the Seller?

Leasehold

If the Property is rented then the Seller will need to get consent from the Landlord for the assignment of the Lease to you, as the Buyer. The Landlord is likely to ask you for financial and trade references. Your solicitor will advise on this. The Landlord must agree to you being a Tenant in order for you to occupy the Property. Your solicitor will deal with this process. It is usual practice for the Seller to pay for the Landlord’s legal fees to prepare the Licence to Assign and the Notice of Assignment.

Freehold

If the property is owned by the Seller then he or she will have the right to sell it to you. In a transaction where this is the case the procedure is different. You may also be liable for Stamp Duty Land Tax (SDLT). This is payable on all commercial properties worth £150,000 and over. Upon completion of the matter your solicitor will register the property at the Land Registry. There will be a  fee for this.Your solicitor will advise you on the procedure for this type of transaction.

Searches

Depending on how long there is left to run on the Lease when you purchase the business and in cases where the property is freehold, you will be advised to undertake searches. The recommended searches are the Local and Commercial Drainage search. However there is the option of an Environmental search, Flood Report and a Chancel search. Your solicitor will advise you.

Contract and other paperwork

The seller’s solicitor will prepare the  contract and your solicitor is able to make any changes if there is agreement by both parties.  You may, for example, wish to put a restrictive covenant in the contract so that the Seller cannot set up the same business next door. The Seller’s solicitor will also prepare the Notice of Assignment upon completion of the transaction. Your solicitor will prepare the Assignment of Goodwill/Lease and Receipt for Fixtures and Fittings and a Transfer (freehold transactions). The Landlord’s solicitor will prepare the Licence to Assign and/or AGA. Paperwork may vary depending on the type of transaction.

Enquiries

Your solicitor will raise various enquiries with the Seller’s solicitor and report these findings back to you before you make the decision to commit to the transaction. Depending on the complexity of the issues involved the transaction can take anything from a few weeks to a few months. Each case is assessed on its own merits and there is no hard and fast rule.

Employees

Are you buying the business subject to the transfer of the existing employees? If so, you will need to consider the implications of this. Being responsible for a work force can be daunting especially for first time business owners. We will be happy to advise you on this and discuss the options available to you.

Selling a Business

If you are considering selling your business it would be advisable to seek legal advice from a solicitor to guide you through the whole process. There are several things to consider and finding out this information prior to your appointment with the solicitor is useful. 

Property

Is your business in a rented property or a property owned by you?

Leasehold

If your business is in a rented property then you will need to get consent from the Landlord for the assignment of the Lease to the Buyer. If the Landlord does not deem the Buyer to be a suitable Tenant then this could cause an issue. Your solicitor will deal with this process. It is usual practice for you to pay for the Landlord’s legal fees to prepare the Licence to Assign and the Notice of Assignment. You will also need to locate your lease for the property as your solicitor will require this.

Depending on the content of the Lease, you may be required to enter into an Authorised Guarantee Agreement (AGA) with the Landlord. This means that you may still be responsible for paying the rent if the Buyer should default with payments at a later stage. Your solicitor will advise.

Freehold

If the property is owned by you then you will have the right to sell it to the Buyer without any issues. If you have a legal charge over your Property this must be repaid upon completion and your Lender will provide a discharge. Your solicitor will advise you on the procedure for this type of transaction.

Accountant

It is advisable to liaise with an accountant regarding any tax issues. Also the accountant will be able to advise you as to how the sale price is to be apportioned i.e. to Goodwill, Property and Fixtures & Fittings.

Contract and other paperwork

Your solicitor will prepare the contract and he or she will discuss various clauses that it contains. Your solicitor will also prepare the Notice of Assignment upon completion of the transaction. The Buyer’s solicitor will prepare the Assignment of Goodwill/Lease and Receipt for Fixtures and Fittings and a Transfer (freehold transactions). The Landlord’s solicitor will prepare the Licence to Assign and/or AGA. Paperwork may vary depending on transaction.

Enquiries

There is likely to be some extensive enquiries raised by the Buyer’s solicitors- these may attract  disbursements i.e. office copy registers and plans, planning permissions or building regulations.Depending on the complexity of the issues involved the transaction can take anything from a few weeks to a few months. Each case is assessed on its own merits and there no hard and fast rule.

Employees

If you have employees within the business you need to be very careful how you deal with them.  Your solicitor will be able to advise you on this.

Further Information and Help

Visit our Commercial Conveyancing Team page