Checklist before you sign a sales contract
The details you need to check before and after you sign the final contract in order to complete the sale of a business.
Before you sign, you need to double-check the details written into the final contract and its accompanying documents. Once you have signed, there is a further list of tasks you need to do before you can complete the sale.
Checklist for selling or buying a business
Before you sign a contract, you should:
- review your aims and how well this contract meets them
- make sure all the agreements made during the negotiation are included in the contract
- make sure there are no vaguely worded provisions, exclusions or limitations in the contract which could give rise to problems later
- if you are buying, ensure you have non-compete agreements in place
- check the financial and tax details again with your financial adviser
- check your obligations and the wording of the contract and other agreements again with your solicitor
- ensure all the necessary documentation and signatories are present at the signing session
- establish a schedule of tasks for completing the sale, making the handover, continuing the business and meeting future obligations
- make sure you have copies of all negotiated agreements kept in a safe place
- have informed and consulted affected employees in compliance with the Transfer of Undertakings (Protection of Employment) (TUPE) regulations
After you have signed a contract, make sure that:
- all others who need to sign have signed the relevant documents
- your solicitor has all the original documents you need to keep
- the buyer's solicitor has copies of all the documents and will present a digital version to both the buyer and seller
- the financial agreements are put into effect
- the buyer's solicitor makes the change of ownership return to Companies House
- in asset and goodwill deals, the seller deregisters and the buyer registers for VAT
- the seller - and the buyer if applicable - continues to inform and consult affected employees in compliance with TUPE as necessary
- both sides are ready for the handover and for informing clients, suppliers, etc
- the business operates smoothly up to and after the sale is completed
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