In a corporate sale, the final stages of the transaction, completion and post-completion, are where the deal is formally executed, and the Buyer assumes ownership of the target company or the assets. These stages involve a series of legal, administrative, and regulatory steps that ensure the transaction is properly concluded and recorded.
Two key stages of completion
1. Exchange
Exchange is the point at which the parties legally commit to the transaction by signing and dating the SPA or APA. At this stage, other key documents such as the Disclosure Letter, Tax Covenant (if separate), and any other ancillary agreements are also signed and delivered.
Exchange binds the parties to proceed with the transaction, subject to any conditions set out in the SPA or APA.
2. Completion
Completion is the moment the transaction is finalised. The obligations of both parties are performed, typically including:
- The Seller is delivering a duly executed stock transfer form or any required form of transfer of title to the assets.
- The Buyer pays the agreed purchase price to the seller.
In many transactions, exchange and completion occur simultaneously to minimise risk. However, in more complex deals, a split exchange and completion may be necessary, usually because certain conditions must be satisfied before completion can take place.
Typical conditions precedent include:
- Regulatory or third-party consents
- Tax clearances
- Internal approvals
The SPA or APA will clearly outline these conditions and the period for satisfying them.
Post-completion steps
Once completion has occurred, the Buyer becomes the legal owner of the shares or assets, and the Seller receives the purchase price. However, several important administrative steps must be followed to ensure the transaction is properly recorded and compliant.
1. Stamp duty
Stamp duty is payable on the transfer of shares where the consideration exceeds £1,000. The current rate is 0.5% of the purchase price, rounded to the nearest £5.
For example:
- If the sale price is £1,234,567, the stamp duty due would total £6,175.0.
The Buyer must:
- Pay stamp duty to HMRC.
- Obtain confirmation of payment
- Submit the stamped transfer form and share certificate to the target company for registration.
Stamp duty must be paid within 30 days of completion, though it is best practice to do so immediately.
2. Tax implications of selling assets
There will be different tax implications depending on the type of asset being transferred. It is important that an accountant is consulted to ensure the correct level of tax is paid per asset.
3. Assignments and novation of contracts with customers and suppliers
As is likely, the parties will need to notify customers and suppliers of the change of ownership of the business and ensure that any notification complies with any APA provisions regulating confidential information and announcements.
4. Company registers and share certificates
The target company must update its statutory registers:
- Register of members: Reflect the transfer of shares from Seller to Buyer
- PSC register: Update within 14 days if maintained internally or via Companies House
- Register of directors and secretaries: Record any resignations or appointments
- Consideration shares: If the Buyer issues shares as part of the consideration, it must:
- Register the allotment
- Issue share certificates to the Seller
- Share certificates: Cancel the Seller’s certificates and issue new ones to the Buyer within two months of lodging the stamped transfer
5. Companies house filings
Several filings may be required post-completion, including:
- AD01 – Change of registered office
- AP01 / AP02 – Appointment of directors
- TM01 / TM02 – Termination of directors or secretaries
- SH01 – Return of allotment of shares
- Resolutions – File any ordinary or special resolutions related to share allotment within 15 days
4. Announcements
While not always necessary, parties may issue press releases or internal announcements to communicate the transaction to stakeholders, customers, or the public.
5. Completion accounts (if applicable)
If the SPA includes a completion accounts mechanism, the parties must:
- Prepare and review the accounts within the agreed timeframe
- Resolve any disputes
- Make any adjusting payments as required
This ensures the final purchase price reflects the actual financial position of the target at completion.
Conclusion
Selling or acquiring a company is a complex process that culminates in the completion and post-completion stages. These steps are essential to legally transfer ownership, settle financial obligations, and update corporate records.
By understanding and properly managing these final stages and engaging experienced legal and financial advisers, parties can ensure a smooth transition, mitigate risks, and achieve a successful outcome. Sellers should work closely with their advisers to manage these steps efficiently, avoid delays, and ensure a clean and compliant transfer of ownership.
How can we help?
The final stages of a sale involve multiple moving parts and strict administrative requirements. We support clients through exchange, completion and post-completion steps, including execution logistics, Companies House filings, statutory registers and coordinating with accountants on tax and financial mechanics. This helps ensure the deal is properly concluded, compliant and recorded without unnecessary delay. Speak to our head of corporate and commercial, Victoria Holland, today.
About the author
Zarenna Porter is a solicitor in the Corporate and Commercial department. Her work spans a wide range of corporate and commercial matters, including acquisitions and disposals, share buybacks, company reorganisations and the drafting and negotiation of commercial contracts and agreements. She has supported businesses operating across different sectors, tailoring her advice to suit the distinct needs of both sole traders and larger corporate entities.