Acquiring a business: key legal steps from heads of terms to completion

February 3, 2026

Acquiring a business: key legal steps from heads of terms to completion

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By Georgina Rees

Read time: 3 minutes

While headlines often focus on deal values and corporate strategy, the success of an M&A deal is often determined by the detail. The legal process that takes a deal from heads of terms through to completion, plays a critical role in managing risk, protecting value and ensuring the deal delivers its intended outcome.

In this article, our expert, Georgina, explores the key legal stages of an acquisition, focusing on the key role of a legal advisor in driving value and ensuring the deal is executed efficiently and effectively.

Heads of terms: setting the foundation

The heads of terms set out the key commercial elements of the deal and help align expectations early on. Though not usually legally binding, except for provisions such as confidentiality and exclusivity, they provide a vital roadmap for negotiation and can reduce the risk of disputes later on.

Key areas covered in heads of terms include:

• The structure of the deal (i.e. share purchase or asset purchase)
• Purchase price and payment terms
• Timetable and key milestones
• Any conditions to be satisfied before completion

Careful planning at this stage ensures the commercial intent is accurately reflected, avoiding unnecessary renegotiation or disruption further down the line.

Drafting and negotiating the SPA or APA

The Share Purchase Agreement (SPA) or Asset Purchase Agreement (APA) is the core legal document governing the transaction and is typically the most heavily negotiated element of a sale.

It includes:

• Details of the parties and their particulars
• Warranties and indemnities: Warranties assure the buyer about the state of the business; indemnities cover specific identified risks.
• Covenants: Commitments around actions pre- and post-completion (including non-compete clauses, maintaining confidentiality).
• Completion mechanics: The documents and deliverables required to complete the transaction.

Consideration and payment structures

Many transactions involve more than a single upfront payment. Alternative consideration structures often involve:

• Deferred consideration: Payment in stages over time, often contingent on certain conditions being met.
• Escrow arrangements: Holding part of the price pending resolution of post-completion matters.

Each has legal and tax implications, so careful drafting and professional advice are crucial to mitigate legal risks whilst ensuring commercial practicality.

Exchange and completion

Depending on the transaction, exchange and completion may occur simultaneously or as separate steps.

Transactions can be structured as:

• Simultaneous exchange and completion: Both happen at once, i.e. completion occurs when the documents are dated.
• Split exchange and completion: Useful when consents need to be obtained or other conditions precedent need to be met before completion can take place.

Where you have split exchange and completion, it’s essential to clearly define the conditions, obligations and timeline between the two events.

Post-completion steps

Important legal support doesn’t end at completion. Post-completion obligations may include:

• Companies House filings and update of company registers
• Stamp duty calculation and payment
• Registration of title (for property assets)
• Ongoing support with integration for the acquiring business and transitional arrangements, including employment and HR support

Clear planning and checklists help manage this phase smoothly.

How Darwin Gray can help

Legal M&A experts play a vital role not just in documenting a deal but in guiding clients through a complex process filled with commercial, regulatory, and practical considerations. A well-advised, well-structured transaction stands the best chance of delivering lasting value for all parties.

If you are considering selling your business, no matter what stage you are at, get in touch with our M&A experts using the contact form or on 02920 829 100 to see how we can help.