Making an offer and completing the purchase

Once you have found the right business and formed a view on its value, the deal moves through a recognised sequence: an offer in writing, a legal phase, and a completion day when ownership and money change hands. Knowing the order in advance keeps you calm and in control when the pace picks up.

This guide walks through making an offer and getting to completion, including the documents involved and where your solicitor takes the lead. It is general information rather than legal advice; the specifics of your purchase agreement should always be handled by a solicitor who acts for you.

Making the offer: heads of terms

Your offer is set out in a heads of terms document (sometimes called a letter of intent). It captures the headline deal: the price, how and when it is paid, what is included and excluded, and any conditions such as satisfactory due diligence or finance being approved. Most of it is deliberately non-binding, so either side can still walk away, but it frames the whole negotiation and signals you are serious.

Structuring the price

Few deals are a single lump sum on day one. Common structures include an upfront payment plus deferred consideration (part of the price paid later out of profits), an earn-out (part of the price tied to the business hitting targets after you take over), or retained funds held back against any warranty claims. Structure matters as much as the headline figure, because it shapes your cash needs and shares the risk.

Exclusivity and the period that follows

Sellers often grant a period of exclusivity once heads of terms are signed, agreeing not to negotiate with other buyers while you complete due diligence and legals. In return they expect you to move at a reasonable pace. Use this window to finish your checks and to brief your solicitor and accountant fully.

The legal stage: the purchase agreement

Your solicitor and the seller's solicitor draft and negotiate the main contract: a Share Purchase Agreement if you are buying the company, or an Asset Purchase Agreement if you are buying selected assets. This sets out exactly what you are buying, the price mechanics, and what each side promises.

Warranties, disclosure, and indemnities

Warranties are the seller's written assurances that the business is as described (the accounts are accurate, there is no undisclosed litigation, the contracts are valid). The disclosure letter is the seller's chance to flag exceptions to those warranties. Indemnities are specific promises to cover identified risks pound for pound. Together they protect you if something turns out to be untrue, so do not treat them as a formality.

Completion day

On the agreed date, the final documents are signed, the funds are transferred (usually solicitor to solicitor), and ownership passes to you. Practical handovers happen around the same time: bank mandates, keys, passwords, supplier and customer notifications, and the transfer of any licences. Your solicitor will give you a completion checklist so nothing is missed.

After completion: the handover period

Most deals include a handover where the seller stays on for a defined period to introduce you to customers, suppliers, and staff and to pass over the knowledge that is not written down. Agree its length and shape in the contract. Spend your first weeks learning how the business actually runs before making big changes; the goodwill you paid for is easiest to keep if customers and staff see continuity first.