Solicitors for buying a business in Leicester

How to buy a company or its assets safely: due diligence, warranties and indemnities, employees, and paying the price in a way that protects you.

Last updated 27 September 2026. General information about the law in England and Wales, not legal advice on your situation.

Buying a business is mostly about finding out what you’re really buying and making sure the price and the contract reflect it.

Due diligence

Before committing, a buyer investigates the business: accounts and tax, customer and supplier contracts, employees and their terms, property and leases, intellectual property, IT and data protection, litigation, and regulatory compliance. Legal due diligence is usually done through a questionnaire and a data room of documents. It shapes the price, the warranties you ask for, and specific protections for problems you find.

The sale agreement

A share purchase agreement or asset purchase agreement sets out what you’re buying, the price and how it’s paid, conditions to completion, and the protections you get:

Warranties: statements by the seller about the business. If they’re untrue and it costs you, you may have a claim, subject to the limits negotiated.
Indemnities: promises to pay for specific identified risks, such as a known tax exposure or dispute.
Restrictive covenants: stopping the seller competing or poaching staff and customers for a period.

Protecting the price

Deferred consideration, an earn-out, a retention held back for claims, or escrow can reduce the risk of paying for something that turns out to be worth less. Sellers will resist, so expect negotiation.

Other points

Consents from landlords, key customers or lenders may be needed. Stamp duty is usually payable on a share purchase, and property in an asset deal may trigger Stamp Duty Land Tax. If the business needs a licence or regulatory approval, factor in the time. Finance terms need to line up with the completion timetable.

Common questions

Is it better to buy shares or assets?

Buying assets lets you choose what you take on and leave historic liabilities behind, but contracts and employees need to be transferred. Buying shares is simpler to complete but you inherit everything the company has done. Tax affects both sides, so involve an accountant.

Do employees transfer on an asset purchase?

Usually, yes. Under the TUPE regulations, employees assigned to the business generally transfer to the buyer on their existing terms, and there are information and consultation duties.

What is warranty and indemnity insurance?

Insurance that pays out for certain warranty breaches instead of, or as well as, the seller. It's more common on larger deals and has exclusions, so it doesn't replace due diligence.