Buying a business online (UK): finding a target, due diligence and completing remotely

We live in a world that is increasingly moving online, and buying a business is no different. Many deals are now completed without the buyer and seller ever sitting in the same room. The short answer to whether you can buy a business online is yes, from finding the target through to completion. This guide walks through each stage and how it works remotely.

How to find a business for sale online

The first step is finding the right business. When you are looking online, business broker websites are a useful resource. They are effectively a database of companies for sale, and they let you search for a business that matches what you are looking for by sector, size and location. For the trade-offs involved in using a broker, see business brokers: pros and cons.

Once you have found a company that looks right, you can deal with the seller electronically. Initial questions, negotiations and the discussions that lead to an offer can all happen by email, video call and ordinary phone calls. There is no need to meet in person to get a deal moving, although many buyers still choose to at some point. What matters is that the seller gets a clear picture of who you are and what you are offering, and that can be done over a screen as well as across a table.

Negotiating and appointing advisers remotely

The second stage is appointing solicitors and accountants to help you with the due diligence process. This too can be done online. My practice, for example, operates completely online, and that is increasingly common across the professions. The initial call, the engagement, the due diligence review and the drafting of the purchase agreement can all happen without a single meeting in an office.

Working with advisers remotely has three main advantages for a buyer:

• Speed. Documents move by email and meetings happen by video call, so there is less waiting around.
• No limit on location. You are not restricted to advisers in your own town or city. You can instruct the solicitor and accountant who are right for the deal, wherever they happen to be.
• Better value. Because you can compare suppliers across the country for the same service, you can often find more affordable prices than you would locally.

Due diligence, exchange and completion online

The final stage is conducting due diligence and then exchanging and completing. All of it can be done online.

Virtual data rooms

Due diligence can be conducted completely online using what are known as virtual data rooms. A virtual data room enables a seller to share confidential documents securely with the buyer over the internet. The seller uploads the contracts, accounts, registers and other records that the buyer has asked for, and the buyer and their advisers review them from wherever they are. Questions raised on the documents and the seller's answers can be handled in the same way, so the whole due diligence exercise has a single, organised home. If you want to understand what that review involves, read types of due diligence when buying a business.

Exchange and completion

Exchange and completion are the signing of the sale and purchase agreement and the transfer of the money. Both can happen electronically.

• Signing. The purchase agreement and the other completion documents can be signed electronically, for example through an e-signature platform, so nobody needs to print, sign and courier anything.
• Payment. The purchase price moves by bank transfer, which is how it would move in any event.

Because nothing physical needs to change hands, exchange and completion can happen on the same day from different locations, with the solicitors on each side confirming by email that the documents are signed and the money has arrived.

Finally, once everything has been signed and the money has been transferred, the parties receive a copy of all of the documents, again usually by email, which can then be stored securely in the cloud. At that point the transaction is complete.

Next steps

If you are searching for a business online, decide early which advisers you want on your side and instruct them before you make an offer, so that due diligence can start as soon as the seller is ready to open a data room. Speak to a corporate solicitor who is set up to run the deal remotely. For the overall legal process you will go through, see how to buy a business in the UK.