Buying a business: share purchases

Articles  |   3 July 2026

Written by
Matthew Lewins, Senior Associate Solicitor

Whilst the acquisition of a business can be done via asset purchase or share purchase (assuming of course that the target business is a private company limited by shares), for the purposes of this note, we focus on the considerations that a buyer should make in relation to a potential share purchase transaction.

If you are considering acquiring a business via way of a share purchase, the process can often appear daunting as there are a number of factors that need to be considered. 

However, the ‘burden’ of the process can be reduced, and the overall speed at which the transaction ultimately proceeds sped up, if you take the time at the outset to put a clear plan in place on how to approach the potential acquisition.

Whilst by no means exhaustive, here are some initial queries that a potential buyer would be wise to consider at the outset of any potential acquisition:
The target company Whilst a more formal commercial, legal and financial due diligence process can be undertaken once heads of terms have been formally agreed, what initial due diligence and information on the target company do you need in order to make a preliminary decision about approaching the owners of the target company about the potential acquisition?
Do you know who the sellers are (and are there any trustee sellers) and are they based in or outside of the UK?
Have you got a clear idea of how best to make initial contact with the sellers? Will you want, or need, to engage a third-party to facilitate making initial contact between the sides and having initial discussions about the potential acquisition?
How will the target company be valued?
Financing the acquisition How will you finance the transaction?
If a third-party lender is going to be used, have you approached them and found out what their requirements will be to provide the funds? Will this have a (material) impact on the timeframes for the transaction?
Will your financing impact how you offer to settle the purchase price payable to the sellers, i.e. will some of the purchase price need to be settled via deferred consideration if you cannot raise the full amount of the purchase price on completion or will an earn-out mechanism be required to make (a portion of) the purchase price dependent on the financial performance of the target company following completion etc.?
Professional advisers Do you know what professional advisors you will require for the acquisition and at what stage in the process you will need each advisor’s input?
Have you considered what the most tax efficient structure for the acquisition will be with your accountant and/or tax advisor?
At what point do you want, or need, to involve your solicitors? Have you got suitable versions of things like confidentiality agreements and heads of terms / letters of intent to provide to the sellers? What length of exclusivity will you want (or need) from the sellers and do your suite of documents for this preliminary stage of the transaction adequately cover this?
Does the industry in which you and/or the target company operates require consideration of the National Security and Investment Act 2021?
Due diligence Assuming that you (and the sellers) still want to proceed with the acquisition following conclusion of the matters mentioned above, have you considered the nature, detail and extent of the due diligence that you will need to undertake on the target company?
Have you discussed the approach that will be needed with your accountant (in relation to the financial due diligence) and solicitor (in relation to the legal due diligence) and how best to structure and deal with this?
Have you raised and discussed with the sellers the approach that you and your professional advisors will be taking on the due diligence so that the sellers know what to expect and can instruct their own professional advisors accordingly to help speed-up and streamline the process?
Will you need an electronic data room for this process and, if so, who will be responsible for setting this up? Are both sides clear on the expectations of when the data room will be ‘opened’ to the buy-side and how the information is to be presented by the sellers in the data room?
Legals This note is not intended to consider the various legal documents that will be required on a share purchase transaction but it is worthwhile raising and considering certain points early on in the process, such as:
discussing with your own solicitors what your intended approach will be on things like the length and detail of the legal documents you propose using, i.e. can the legal documents – such as the share purchase agreement and legal due diligence questionnaire – be tailored for smaller, less risky transactions? Sellers will appreciate a buyer who takes a proportionate, common-sense approach to the process; and
getting confirmation from the sellers on who their solicitor will be (so that your own solicitors can liaise with them to help streamline the due diligence and legal process).

Transactions will always have unforeseen issues and challenges that arise as the process goes along but, if you can give the required attention to the various areas that are likely to come up during the initial stages of the process, your chances of dealing with such challenges successfully and keeping the acquisition on-track will be greatly increased.

If you are considering purchasing a business via share purchase and require assistance, or would like to discuss any aspect of the process, please feel free to get in touch with Matthew Lewins from our Corporate Team on matthew.lewins@thackraywilliams.com. 

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