Publish date

5 February 2024

Selling your business: Closing a deal


The closing or completion is the final stage of a deal, and is the process that takes place when all parties involved have agreed on the final versions of the legal documentation relating to the transaction, which are then signed and exchanged by the parties to create a legally binding sale and purchase contract.


Timing is key when a transaction is closing. A target date is usually set, which is often driven by commercial factors,. Your legal team will work tirelessly  to the deal is delivered on time. Typically the exchange of the signed acquisition agreement and completion of the transaction occur simultaneously. However, sometimes it will be appropriate to have a delay between exchanging contracts and close. For example, if the buyer is relying upon bank finance to fund the deal, or various conditions may need to be satisfied before completion can take place, such as third-party approvals

Board approval

In situations where the buyer and seller of the target business are corporate entities, their respective boards of directors will hold board meetings to approve the terms of the acquisition and the execution (signing) of the transaction documents.

At completion, the target company (and any subsidiaries) will also hold a board meeting to approve the registration of the transfer of shares or the transfer of assets to the buyer, and deal with any administration tasks, such as filing forms at Companies House.

Signature of legal documents

On completion, the seller will be required to deliver various documents to the buyer, as set out in the acquisition agreement. In advance of completion, we will work with you to prepare a completion agenda to identify the items that need to be handed over to avoid any last minute issues or delays. On completion, the buyer will pay the completion payment and will become entitled to the shares in the target company or the business assets purchased.

Post-close steps

Naturally, following completion, the buyer will need to undertake various post completion tasks. These may involve the payment of stamp duty on the purchase price for the shares or assets, making any necessary staff and customer announcements and dealing with administrative matters.

The buyer will also want to ensure a smooth and successful integration of the new business into its existing activities, if relevant. Planning for integration is essential and should begin when the acquisition is first considered. The parties sometimes enter into transitional services agreements to facilitate this process.

Sometimes a seller may agree to remain in the business for a specified period of time post completion, in situations where the seller has a vested interest in remaining in the business. For example, where there may be an earn out in the consideration structure. The seller will assist with a smooth transition of the business to the buyer, often in a consultancy capacity or sometimes remaining as a director.

Time limits for any claims

The acquisition agreement will invariably include time limits for bringing warranty or other types of claims. Consequently, a seller should take note of the relevant time limits in which a buyer may notify or bring a claim under the acquisition agreement to ensure that they are not time-barred if an issue does arise in the future.

Further professional advice

We recommend that sellers should obtain independent tax and investment advice in relation to the proceeds of the sale, which can be quite significant depending upon the value of the business being sold. In addition, we recommend all individual sellers should consider updating or making a new will to ensure that any sale proceeds are included.

If you have any questions about the topics raised in this article, please get in touch.


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