Short answer (TL;DR)

No, you are not legally required to use a solicitor to buy a business in the UK. But buying a business is not like buying a house, and there is no standard process protecting you. When you buy a company’s shares you inherit everything it owns and everything it owes, including debts, disputes, and liabilities nobody mentioned. A business purchase solicitor runs legal due diligence to find those problems, then drafts the warranties and indemnities that give you a remedy if something was misrepresented. Legal fees typically work out around 1% of the deal value, which is small against the cost of discovering an undisclosed liability after completion, when you own it.

Do you legally need a solicitor to buy a business?

There is no law requiring a solicitor for a business purchase. In principle you could agree a price, sign a document you drafted yourself, and transfer the money.

In practice, almost nobody does, and for one reason: the risk sits entirely with you. Company law works on the principle of caveat emptor, or buyer beware. The seller is not obliged to volunteer that a key customer gave notice last month, that the company is in dispute with a supplier, or that the software the business runs on is unlicensed. Unless your contract makes the seller say otherwise in writing, and gives you a remedy when it turns out not to be true, you have very little recourse once you own the business.

That is the real function of a solicitor here. Not paperwork, but shifting risk from you back onto the person who knows the business best.

What does a business purchase solicitor actually do?

A specialist commercial or corporate solicitor handles four things on a purchase:

Structuring the deal. Deciding whether you buy the shares or the assets, which changes what you inherit and what tax you pay. This choice is usually worth more than everything else combined.
Legal due diligence. Investigating the company through its contracts, property, employment terms, litigation history, intellectual property, and filings, then telling you what they found and what it means for the price.
Drafting and negotiating the agreement. Preparing the share purchase agreement or asset purchase agreement, and negotiating the warranties, indemnities, and restrictive covenants that determine your protection.
Completion and post-completion. Handling stock transfer forms, board resolutions, stamp duty, and Companies House filings so ownership actually passes properly.

A note that matters: instruct a corporate or commercial solicitor, not a conveyancer or general high street firm. Buying a business is a corporate transaction, and inexperience in this area causes real problems. If you want the wider picture on what this type of lawyer covers, see our guide on what commercial solicitors do.

Share purchase or asset purchase: what is the difference?

This is the first question your solicitor will ask, and it changes everything downstream. In a share purchase you buy the company itself, so the company continues unchanged and you inherit its entire history. In an asset purchase you buy selected parts, such as equipment, stock, goodwill, and contracts, and leave the company shell (and much of its baggage) with the seller.


	Share purchase	Asset purchase
What you buy	The company, whole	Chosen assets only
Past liabilities	You inherit them	Generally stay with the seller
Contracts and licences	Usually continue automatically	Often need consent to transfer
Employees	Stay employed by the same company	Transfer to you under TUPE
Stamp duty	0.5% on shares over £1,000	None on shares; SDLT may apply to property
Usually preferred by	Sellers	Buyers

Sellers push for share sales because they walk away cleanly. Buyers usually prefer asset purchases because the liabilities stay behind. Where you land is a negotiation, and it is often traded against price. A seller who insists on a share sale is asking you to take on unknown risk, and that should be reflected in what you pay or in the indemnities you demand.

On stamp duty, share transfers on a paper stock transfer form attract Stamp Duty at 0.5% of the consideration where that exceeds £1,000, rounded up to the nearest £5, and must be notified to HMRC within 30 days of the form being signed and dated.

What does legal due diligence actually uncover?

Due diligence is where the money is made or lost. Your solicitor investigates the company and reports what is really there, rather than what the sales particulars claim. The areas that most often produce nasty surprises in SME deals:

Customer contracts. Do the big accounts have change of control clauses that let them walk away the day you buy? A business whose revenue is concentrated in three customers who can all exit on completion is worth a lot less than the accounts suggest.
Employment. Who is actually employed, on what terms, and are there unresolved grievances, tribunal claims, or people misclassified as contractors?
Property and leases. Is the lease assignable, when does it end, and is there a dilapidations liability waiting?
Intellectual property. Does the company actually own its brand, software, and designs, or did a freelancer build the website and never assign the copyright? This one is extremely common and genuinely damaging.
Litigation and disputes. Anything ongoing, threatened, or brewing.
Compliance and filings. Companies House records, the PSC register, data protection, sector licences.

Where diligence turns up a problem, you have options: reduce the price, require the seller to fix it before completion, take a specific indemnity, or hold back part of the price until the risk passes. Without diligence you have none of these, because you do not know the problem exists.

What protection do warranties and indemnities give you?

These two words are why the agreement is worth paying for.

Warranties are statements of fact the seller makes about the business, for example that the accounts are accurate, that there is no ongoing litigation, or that the company owns its intellectual property. If a warranty turns out to be false and you suffer loss, you have a claim for breach of contract.

Indemnities are a promise to reimburse you pound for pound for a specific identified risk, such as an ongoing tax enquiry or a known dispute. They are stronger and more direct than warranties because you do not have to prove loss of value in the same way.

A seller’s solicitor will try to limit both, through disclosure letters, financial caps, and time limits. This negotiation is the heart of the deal, and it is not something to attempt without advice. Our guide to red flags in business contracts covers some of the clauses that do the most quiet damage.

What happens to employees when you buy a business?

It depends entirely on the structure, and buyers routinely get this wrong.

In a share purchase, the employing company does not change. The staff keep the same employer, and TUPE is not triggered.

In an asset purchase, the Transfer of Undertakings (Protection of Employment) Regulations 2006 generally apply. Employees assigned to the business being transferred move to you automatically, on their existing terms and conditions, with continuity of service preserved. You cannot pick and choose who transfers, and dismissals connected with the transfer are likely to be automatically unfair. There are also information and consultation obligations that both parties must meet before completion.

The practical point: TUPE is not optional and cannot be contracted out of. If you are buying assets, budget for the workforce coming with them and get employment and HR support involved early rather than after you have signed.

How much does a solicitor cost when buying a business?

A widely used rule of thumb across UK firms is roughly 1% of the transaction value, though the range in practice is wide and depends far more on complexity than on price.


Deal type	Typical legal fee guide (excl. VAT)
Simple small asset purchase	£1,500 to £3,500
Straightforward share purchase, single seller	£3,000 to £7,500
Mid-size deal with property or multiple sellers	£7,500 to £15,000+

Quotes vary enormously for the same deal, so ask what is actually included: how many rounds of negotiation, whether due diligence is in scope, and whether the disclosure letter is covered. A low quote that excludes diligence is not a bargain. For a fuller breakdown of legal pricing, see our guide on how much a commercial solicitor costs.

What goes wrong when buyers skip the solicitor?

The failure patterns are consistent and predictable:

Buying shares in a company with an undisclosed debt or tax liability, and discovering it after completion when it is legally yours.
No restrictive covenants, so the seller opens a competing business down the road and takes the customers with them.
Assuming key contracts transfer when they require the counterparty’s consent, and losing them at completion.
Finding the business does not own its own brand or software.
Warranties so heavily qualified by the disclosure letter that they provide no protection at all.

Every one of these is cheaper to prevent than to litigate. If you are on the other side of a deal, our guide on selling a business without a solicitor covers the mirror image of these risks.

How to choose a business purchase solicitor

Look for a firm that does corporate transactions regularly rather than occasionally. Ask how many share and asset purchases they have handled in the last year, who will actually do the work, and whether they will quote a fixed fee or a capped fee for the diligence and drafting phases. Ask them to explain the share versus asset question in plain English before you instruct. If they cannot, they are not the right firm.

Buying a business? Get the structure right before you sign

At Nouveau Legal, we act for startups, SMEs, and growing companies across the UK on business purchases, on a fixed-fee, plain-English basis. We tell you what the deal actually exposes you to, negotiate the protections that matter, and get the legal structure of your business right from the start. Whether the deal turns on customer and supplier contracts, intellectual property, or company law compliance, you will know the price before we start.

Thinking of buying a business? Contact Nouveau Legal for a no-obligation conversation about the deal and a fixed-fee quote.

Frequently asked questions

Do I need a solicitor to buy a business in the UK?

You are not legally required to use one, but it is strongly advisable for anything beyond the simplest asset purchase. Buying a business carries no standard consumer protection, and the principle of buyer beware applies. A solicitor runs due diligence to find undisclosed liabilities and drafts the warranties and indemnities that give you a remedy if the seller has misrepresented the business.

Should I buy the shares or the assets of a business?

Buyers usually prefer an asset purchase because past liabilities generally stay with the seller, while sellers prefer a share sale because it gives them a clean exit. A share purchase means you inherit the company whole, including its history. The right choice depends on the tax position, the transferability of key contracts, and how much unknown risk you are willing to accept, so take advice before agreeing heads of terms.

How much do solicitors charge for buying a business?

A common rule of thumb across UK firms is around 1% of the transaction value. As a guide, a simple asset purchase often costs £1,500 to £3,500, a straightforward share purchase £3,000 to £7,500, and a larger deal with property or multiple sellers £7,500 to £15,000 or more, excluding VAT. Always confirm whether due diligence and the disclosure letter are included.

Do employees transfer when you buy a business?

In a share purchase the employer does not change, so employees simply continue and TUPE is not triggered. In an asset purchase, TUPE 2006 generally applies and employees assigned to the transferring business move to you automatically on their existing terms with continuity of service. You cannot choose which employees transfer, and there are consultation obligations before completion.

Do I pay stamp duty when buying a business?

On a share purchase using a paper stock transfer form, Stamp Duty of 0.5% applies where the consideration exceeds £1,000, rounded up to the nearest £5, and must be notified to HMRC within 30 days of signing. Asset purchases do not attract stamp duty on shares, though Stamp Duty Land Tax may apply if the deal includes property. Tax treatment varies, so take specific advice.

What is a share purchase agreement?

A share purchase agreement, or SPA, is the contract at the centre of a company acquisition. It sets out the price and payment terms, and more importantly the warranties, indemnities, and restrictive covenants that determine what protection you have if the business is not what the seller said it was.

This article is general information, not legal advice. Figures are guide prices as at July 2026 and vary by firm, deal size, and complexity. Tax treatment depends on individual circumstances. For advice on your specific transaction, speak to a qualified corporate or commercial solicitor.

Business Purchase Solicitor: Do You Need One to Buy a Business in the UK?