Legal Practice Notes

This Practice Note forms part of the Lexis+® UK Corporate Private equity buyout transaction collection. Drafting the share purchase agreement Typically, the private equity investor’s solicitors will ordinarily prepare and circulate the opening draft of the share purchase agreement ( SPA). Which precedent agreement to use When selecting an appropriate Precedent, consider: whether to use a buyer’s draft (prepared on terms generally favourable to the buyer and suitable as the buyer’s first draft) or a seller’s draft (prepared on terms generally favourable to the seller, suitable where the seller produces the first draft or is marking up the buyer’s draft) whether completion is subject to conditions: if conditions exist, there must be a gap between signing the SPA—when beneficial title in the sale shares passes to the buyer (exchange)—and the point at which the transaction is completed and legal title in the sale shares passes to the buyer...

This Practice Note forms part of the Lexis+® UK Corporate Private equity buyout transaction collection. On completion, the necessary formalities to finalise and give effect to the private equity buyout are carried out, such as signing the stock transfer form and delivering and executing all completion deliverables specified in the share purchase agreement ( SPA) and the investment agreement ( IA). Exchange—the execution of the SPA and IA—and completion can occur concurrently or be separated, depending on whether the transaction documents are unconditional or conditional. These stages may take place in person or remotely (by telephone and email). Refer to Practice Note: Issues arising where there is split exchange and completion—share and asset purchases... Preparations for the completion meeting Prepare list of documents/completion agenda Prepare, well before completion, a document list identifying everything to be produced and who is responsible for each item. Set out a...

Practice Note This Practice Note sits within the Lexis+® UK Corporate Private equity buyout transaction collection. As part of disclosure, both the seller and the target’s management prepare separate disclosure letters, to be settled and executed at exchange. Although both also pass information about the target to the private equity investor and ultimate buyer, disclosure letters serve a different function from due diligence. They allow the seller and managers to qualify the warranties contained in the warranties schedule to the formal documents, thereby limiting potential liability under those warranties. If, after a buyer alleges a breach of warranty under the share purchase agreement, it can be shown that the matter was disclosed to the buyer in line with the standard of disclosure set out in the formal documents, the buyer’s warranty claim will fail. By contrast, warranties in an investment...

Factors influencing structure How a contemplated buy-out should be shaped is usually addressed early in the timetable and is typically set out in a document produced by the sponsor’s tax advisers, commonly referred to as a tax structure paper or memorandum. As the transaction proceeds, the structure often develops as fresh information emerges and professional advice is finalised. In this setting, ‘structure’ generally encompasses: the corporate framework put in place to effect the acquisition; the injection of funds into that framework and their movement within the group so they are where they must be at completion; and the steps required to implement the acquisition, the sponsor’s investment and any reinvestment by management These components are naturally interconnected. The term can also at times be used more broadly to cover determining the capital structure, ie the sources of the...

Any limited company planning to carry out a redemption of redeemable shares is required to comply with the provisions set out in the Companies Act 2006 ( CA 2006). In addition to the framework under CA 2006, separate rules, as well as guidance, are pertinent where the company is listed or admitted to AIM. For an explanation of the legal conditions a company must satisfy to issue redeemable shares, with reasons a company might proceed to redeem its shares, refer to Practice Note: Issue of redeemable shares......

Coronavirus ( COVID-19): In light of the coronavirus ( COVID-19) outbreak, certain Companies House filings and associated administrative processes have been temporarily paused or altered. These temporary changes apply to filing requirements and administrative steps. For more on the effects of COVID-19, see Practice Note: Coronavirus ( COVID–19)—impact on company filing and administrative procedures [ Archived]. A limited company planning to undertake a redemption of redeemable shares must observe the requirements of the Companies Act 2006 ( CA 2006). Alongside CA 2006, additional rules and guidance are pertinent to a listed company or an AIM company (for further details, refer to our Practice Notes on public company redemptions of shares). Further guidance is available in our related Practice Notes. For analysis of the legal obligations a company must satisfy to issue redeemable shares, and the reasons a company might redeem its shares, see...

This Practice Note, prepared with input from Rebecca Cousin of Slaughter and May on market practice, outlines the preparatory steps a quoted company can take to ensure it can react promptly and effectively to a potential bid. It looks at how an offeree may protect itself from unwelcome approaches (anticipated or otherwise) by having suitable systems and procedures in place before any offer is made. It also considers the issues that arise where a quoted company chooses to actively seek suitable offerors by publicly putting itself up for sale, including by commencing a formal sale process ( FSP). For discussion of the matters for an offeree to assess after an approach, see Practice Note: Preliminary issues for a target to consider following an approach. Internal organisation The offeree should have appropriate systems and procedures in place so it can respond quickly and...

STOP PRESS : Significant reforms to the UK prospectus regime came into force on 19 January 2026. The new rules covering public offers of securities and admissions to trading activities in the UK are contained and set out in the Public Offers and Admissions to Trading Regulations 2024, SI 2024/105 (the POATRs) and the FCA sourcebook, The Prospectus Rules: Admission to Trading on a Regulated Market ( PRM). The UK Prospectus Regulation and the FCA Prospectus Regulation Rules have been repealed. The measures aim to streamline capital raising and materially cut the instances when a company is obliged to publish an FCA-approved prospectus for a subsequent share issue. For full information on the changes, see Practice Note: UK prospectus regime reform. This Practice Note reflects the prospectus regime in force prior to 19 January 2026......

Heads of terms A business purchase (the target business) typically starts with settling the key commercial points—price, structure of the deal, due diligence steps, exclusivity provisions and timetable. These points are commonly negotiated by the parties themselves, or alongside their accountants and other professional advisers, and then set out in heads of terms, sometimes called a ‘letter of intent’ or ‘memorandum of understanding’. See Practice Note: Heads of terms—share and asset purchases. Where environmental risks are known or suspected, the heads of terms might cover: providing the buyer with any existing environmental report(s) a requirement for a reliance agreement or collateral warranty, giving the buyer the benefit of those report(s) a process allowing the buyer to undertake a phase 1 environmental audit or phase 2 ground investigations headline terms for an environmental indemnity or environmental...

This Practice Note sits within the Share purchase transaction collection. After the parties settle the headline terms of a commercial deal, including how the transaction will be structured, they may put in place certain preliminary documents at the outset, before due diligence begins and the principal documentation is negotiated... Heads of terms—private M& A—share purchase Heads of terms are generally not legally binding (as they are treated as an ‘agreement to agree’), yet they are frequently used in share purchase transactions to capture the broadly agreed key commercial points before due diligence is undertaken and the share purchase agreement is drafted and negotiated... Heads of terms—private M& A—share purchase—cross-border This precedent is intended for use in a cross-border share purchase where the target company is incorporated outside the United Kingdom... Negotiation: the key terms to include Both parties will want the heads of terms to cover: a clear...

What Pre-emption rights provide every shareholder in a company with a means to safeguard their percentage holding from dilution arising when new equity securities are allotted. Such rights exist as a matter of statute in the Companies Act 2006 ( CA 2006), and also under the UK Listing Rules (the UKLRs), which are relevant to any company with a listing of equity shares in the equity shares (commercial companies) category. Careful thought should be given to the breadth of these rights, as a company must observe them unless and to the extent they have been disapplied, varied or excluded. In addition, a company’s articles of association, or any shareholders’ agreement to which it is party, may contain pre-emption provisions that must likewise be followed except where they have been disapplied, waived or removed. For guidance on how pre-emption rights operate across different company types, see...

Pre-emption rights on allotment Pre-emption rights on allotment provide every shareholder in a company with a means to guard against dilution of their percentage stake where this could result from a share allotment, the issue of rights to subscribe for shares, the conversion of securities into shares, or a disposal of treasury shares by that company. This Practice Note addresses the pre-emption rights applicable to an allotment of equity securities by a public company that is neither a listed company nor an AIM company (that is, an unlisted public company), as prescribed in the Companies Act 2006 ( CA 2006). Close attention should be paid to the breadth of those statutory pre-emption rights, because an unlisted public company must observe them to the extent that they have not been disapplied, varied, waived, or excluded and ensure that it complies with them to that...

This Practice Note forms part of the Share purchase transaction collection. Timing Any purchase of a private company or business typically starts with the parties negotiating, seeking to settle the outline of the commercial terms on a provisional basis at a high level from the outset. Foremost among these, and decisive as to whether a deal exists at all, is invariably the price in practice. That said, a range of matters—commercial and legal in nature—must be tackled from the very start, not least settling between the parties the proposed structure of the deal: will it proceed as a share sale or an asset sale? After the headline commercial points are agreed in principle, legal analysis is in train and the structure fixed, the parties will usually, as a matter of course, put in place a set of preliminary documents before the...

FORTHCOMING CHANGE relating to the modernisation of stamp taxes on shares framework: In 2027, stamp duty and SDRT will be superseded by a single, self-assessed levy on securities, the securities transfer charge ( STC), which will be paid and reported through a new online portal. The core features of the STC are expected to align with the proposals outlined in the 2023 consultation. Finance Bill 2026 ( FB 2026) introduces an enabling power, taking effect from Royal Assent, to permit secondary legislation that allows taxpayers to trial the new digital service by self-assessing their stamp taxes on securities liabilities and reporting transactions electronically via a digital service. News Analyses: Budget 2025— Tax analysis— Stamp and transfer taxes Tax update spring 2025— Stamp taxes on shares modernisation Tax update spring 2025— Tax analysis— Stamp and transfer taxes TAMD 2023— Stamp taxes on shares...

Practice Note This Practice Note outlines the terms typically found in a limited partnership agreement for partnerships established under the Limited Partnerships Act 1907 ( LPA 1907). It also sets out the default statutory rules that apply where no limited partnership agreement is in place, as well as the provisions commonly included in such agreements. With effect from 6 April 2017, the LPA 1907 was amended by the Legislative Reform ( Private Fund Limited Partnerships) Order 2017, SI 2017/514 ( LRO). A draft of the LRO was issued in January 2017 by HM Treasury, together with an explanatory document. The LRO followed a government consultation that began in July 2015 and concluded in October 2015 on proposed amendments to UK limited partnership legislation to make these structures more effective vehicles for private equity and venture capital investments. The reforms introduced by the LRO apply solely to...

You are not required to act like the police, but you must stay vigilant for indicators of bribery and corruption and make the kinds of enquiries a reasonable person with your qualifications, knowledge and experience would undertake. This Practice Note highlights common warning signs that typically warrant further enquiry. It draws on examples from the Wolfsberg Anti‑ Bribery and Corruption ( ABC) Compliance Programme Guidance and the International Foreign Bribery Taskforce ( IFBT). These factors are not conclusive evidence; they are simply red flags. Give close attention where multiple indicators appear. Such signals can arise during a range of activities, including intermediary engagement, business acquisition or day‑to‑day operations, as well as gifts and entertainment, charitable contributions, and related areas. General There has been a shift in the behaviour of employees, intermediaries or business partners, for example: an...

The Sentencing Council ( SC) The Sentencing Council ( SC) issues offence-specific sentencing guidance for use by magistrates’ courts and the Crown Court in England and Wales. Under section 59 of the Sentencing Act 2020 ( SA 2020) (the Sentencing Code), courts in England and Wales are required to apply these guidelines when sentencing individuals for health and safety offences, unless doing so would be contrary to the interests of justice. The guidelines do not extend to Scotland or Northern Ireland, though courts in those jurisdictions may refer to them to assist their sentencing function. See Practice Note: Sentencing health and safety cases in Scotland. The SC has released offence-specific guidelines for courts sentencing individuals for breaches of the Health and Safety at Work etc Act 1974 ( HSWA 1974) and for breaches of health and safety regulations. HSWA 1974 and the Health & Safety...

Practice Note This Practice Note sets out the legal and practical considerations for bringing a business acquisition to a successful completion. On completion, ownership of the relevant assets will move from the seller to the buyer. Depending on the transaction’s complexity, delivering every aspect of the deal after completion may take time and give rise to complications and disputes between the parties; some can be anticipated and catered for, while others cannot. Guidance on many of the matters outlined below appears in other Practice Notes and the drafting notes to Precedent: Asset purchase agreement—pro-buyer—corporate seller—conditional—long form. The purpose of this note is therefore to summarise the issues (including cross-references, where relevant, to such guidance) and to provide a checklist of legal and practical points to address during the negotiation and drafting of the asset purchase agreement ( APA) and at each...

ARCHIVED: This Practice Note has been archived and is not maintained. This Practice Note sets out how to assess and adjust key contractual provisions so they are fit for use after 11 pm on 31 December 2020, the moment (known as IP completion day) when the implementation period for the UK’s departure from the EU concluded. It is primarily designed to support organisations updating their standard form contracts for post‑ IP completion day use, rather than revising live agreements, though it may assist with those too. While the underlying legal landscape has shifted considerably, most contracts are largely unaffected and English contract law itself remains unchanged. The Trade and Cooperation Agreement ( TCA) between the EU and the UK concerning their future relationship does not materially alter the consequences of the end of transition. For more detail, see: LNB News 24/12/2020 76 and LNB News...

ARCHIVED : This Practice Note has been archived and is not maintained From 31 January 2020 (exit day), the UK ceased to be an EU Member State and its relationship with the EU is governed by the Withdrawal Agreement, which took effect on 1 February 2020. Under the Withdrawal Agreement, on exit day the UK entered an implementation period, during which it continues to be regarded as a Member State for many purposes, including trade. As a third country, the UK can no longer take part in the EU’s political institutions, agencies, offices, bodies and governance structures (save to the limited extent agreed), but the UK must continue to comply with EU law and remain subject to the continuing jurisdiction of the Court of Justice of the European Union in line with the transitional arrangements in the Withdrawal...