Buying a business is a structured process, and each stage has its own legal documents. Knowing the typical roadmap helps an SME buyer (or seller) in England and Wales stay in control and avoid surprises. Here is a plain-English guide to the main steps and the paperwork involved.
Step 1: Decide the structure, share purchase or asset purchase
The first decision shapes everything:
- Share purchase, you buy the shares in the company, acquiring it with all its assets and liabilities. Documented by a Share Purchase Agreement (SPA).
- Asset purchase, you buy specific assets (and chosen liabilities), leaving the rest behind. Documented by an Asset Purchase Agreement (APA).
The choice drives liability, tax and employees (TUPE may transfer staff on an asset sale), so take advice early.
Step 2: Confidentiality, the NDA
Before the seller shares sensitive information, the parties sign a Non-Disclosure Agreement (NDA) so financials, customer data and know-how are protected if the deal does not proceed.
Step 3: Agree the outline, Heads of Terms
The parties record the main commercial points (price, structure, conditions, timetable) in Heads of Terms (also called Heads of Agreement or a Letter of Intent). These are usually "subject to contract" and mostly not binding, except clauses such as confidentiality, exclusivity and costs.
Step 4: Due diligence
The buyer investigates the target (legal, financial, tax and commercial due diligence) to verify what it is buying and uncover risks. Findings shape the price, warranties, indemnities and conditions. Documents here include due diligence questionnaires, the seller's data room, and the buyer's due diligence reports.
Step 5: Negotiate the main agreement
The SPA or APA is drafted and negotiated. Key contents include:
- the price and how it is paid/adjusted (completion accounts, locked box, earn-out);
- conditions to completion (if signing and completion are split);
- warranties (assurances about the business) and indemnities (pound-for-pound cover for specific risks);
- limitations on the seller's liability (caps, time limits);
- restrictive covenants stopping the seller competing.
Step 6: Supporting documents
Depending on the deal, you may also need:
- a Disclosure Letter, the seller qualifies the warranties by disclosing known issues;
- a Tax Deed / Tax Covenant, dealing with pre-completion tax liabilities;
- a Novation Deed/Agreement or assignments, to transfer key contracts to the buyer (especially on an asset purchase);
- TUPE information and consultation documents where employees transfer;
- property documents (assignment/transfer or new lease), and consents (landlord, lenders, regulators, change-of-control consents);
- board and shareholder resolutions approving the transaction; and financing documents if the purchase is funded by debt.
Step 7: Completion
At completion, the documents are signed, the price is paid, and title passes:
- on a share sale: stock transfer forms, share certificates, board resolutions registering the transfer, and director/secretary changes;
- on an asset sale: transfers/assignments of the assets, novations of contracts, and property transfers.
Step 8: Post-completion
- Pay any stamp duty (0.5% on a share purchase) or SDLT (on property), and file as required.
- Update Companies House (e.g. director changes, charges) and the company's statutory registers.
- Implement integration, TUPE follow-up, and any earn-out monitoring.
Key takeaways
- The roadmap is typically: choose share vs asset purchase → NDA → Heads of Terms → due diligence → SPA/APA → supporting documents → completion → post-completion.
- Core documents: NDA, Heads of Terms, SPA or APA, Disclosure Letter, Tax Deed, novations/assignments, plus resolutions and consents.
- Share vs asset purchase is the pivotal early choice (liability, tax, TUPE).
- Budget for stamp duty/SDLT, Companies House filings and post-completion integration.
Sources
- Companies Act 2006 (share transfers, resolutions, filings); Stock Transfer Act 1963; stamp duty on shares; SDLT (Finance Act 2003) on property
- TUPE, Transfer of Undertakings (Protection of Employment) Regulations 2006 (employees on an asset sale)
- Standard M&A documentation and practice in England & Wales (NDA, heads of terms, SPA/APA, disclosure letter, tax deed, novation)
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.