Buying a business in London usually takes between 3 and 9 months and follows a clear path: set your criteria, find targets, agree heads of terms, check the business, fund the deal, sign the contract and complete. This guide from The London Report walks through each step for UK buyers, explains share and asset purchases, and lists the legal, tax and staffing points that most often catch buyers out. It replaces the earlier 2025 version, which was general and unsourced.
It is the process guide in a short series with how to finance a London business purchase, the benefits of buying an established business in London and the top industries for businesses for sale in London. This is general information, not legal, tax or financial advice.
Key takeaways
- Most UK business purchases take 3 to 9 months, with smaller and well-prepared deals at the quicker end (iwoca). Funding alone can take 4 to 8 weeks after applying (Capitalise).
- You will choose between a share purchase (you buy the company) and an asset purchase (you buy selected assets). The legal and tax effects differ, so decide this early with advice.
- Staff usually transfer under TUPE, a genuine going-concern sale can be outside VAT, and buying shares costs 0.5% stamp duty.
- Check licences and the lease before you pay anything. An assigned lease is charged SDLT only on the price paid for it.
- Do not skip due diligence, and agree a handover period with the seller in the contract.
The London market at a glance
London had an estimated 1.042 million private sector businesses at the start of 2025, the most of any UK region, and together with the South East it accounts for 34% of the UK total (DBT Business Population Estimates 2025). In 2024 the ONS counted about 76,000 business births and 61,000 deaths in London, and London had the highest regional birth rate at 12.7% (ONS, Business demography, UK: 2024). So there is a lot to choose from, and a lot of churn, which makes careful checking more important.
How to buy a business in London, step by step
- Set your criteria. Sector, size, location, budget and how involved you want to be. Our guide to the top industries for businesses for sale in London can help you narrow the field.
- Find targets. Online marketplaces and brokers (iwoca names Daltons, BusinessesForSale.com and RightBiz), plus trade contacts, accountants and professional advisers (iwoca).
- Sign an NDA and agree heads of terms. The NDA protects sensitive information. Heads of terms set out the main commercial terms agreed in principle, such as price, conditions and payment structure.
- Decide the deal structure. Share purchase or asset purchase, with different legal and tax effects.
- Run due diligence. Legal, financial and operational checks on the business, ideally by your accountant and solicitor.
- Arrange funding. Agree heads of terms before approaching lenders, then prepare a business plan, forecasts and the target’s accounts (Capitalise).
- Negotiate and sign the sale and purchase agreement (SPA). It sets out the terms of sale, warranties, indemnities and conditions for completion. The seller’s disclosure letter lists exceptions to the warranties.
- Complete and hand over. Transfer or reassign contracts and leases, transfer or reapply for licences, and consult affected staff where TUPE applies.
Timing varies. iwoca says most acquisitions take between 3 and 9 months, with smaller and well-prepared deals at the lower end. Missing or inaccurate accounts, regulatory steps, price disputes and delayed funding are the common causes of delay. Capitalise says funding often takes four to eight weeks from application to funds being released.
Share purchase or asset purchase?
This is the first big legal decision. In a share purchase you buy the company itself. In an asset purchase you buy selected assets, such as equipment, stock, contracts and goodwill. iwoca notes these have different legal and tax implications, and Sprintlaw says they differ on liability, tax and what you own after completion. The table gives the main points. It is a starting point for a conversation with your solicitor, not a substitute.
| Point | Share purchase | Asset purchase |
|---|---|---|
| What you buy | The company, with its history | Selected assets and contracts you agree |
| Liabilities | Stay inside the company, so you inherit them unless protected by warranties and indemnities | You choose what to take, though some obligations may still follow the business |
| Stamp duty | 0.5% on the share price (GOV.UK) | Taxed differently. Property or lease costs may bring SDLT (GOV.UK) |
| Staff | The employing company stays the same, so TUPE is generally not the route (check with a solicitor) | The employer changes, so TUPE usually applies (GOV.UK) |
| VAT | Not a sale of assets, so TOGC rules are not the issue | May qualify as a transfer of a going concern, so no VAT is charged (GOV.UK) |
| Contracts and licences | Stay with the company | Usually need assigning or reapplying for |
Legal checks before you pay
- Company records. Check the registered details, officers, charges (security held by lenders) and any insolvency history on Companies House. It is free.
- Licences. Some businesses need licences that may not pass automatically. GOV.UK lists a premises licence transfer application and licence holder consent form for alcohol licensing (GOV.UK: Alcohol licensing). Ask your solicitor and the local council what applies to your type of business.
- The lease. If the business trades from rented premises, check the remaining term, rent and whether the landlord must agree to an assignment. If you take an existing (assigned) lease you pay SDLT only on the price paid for it, not on the rent (GOV.UK: SDLT non-residential rates).
- Staff. Under TUPE, jobs usually transfer with their terms and continuity of employment (GOV.UK). Plan the consultation with affected staff.
- VAT. A sale of assets that qualifies as a transfer of a going concern is not a supply for VAT, so no VAT should be charged. The conditions are strict (GOV.UK: VAT Notice 700/9).
- Contracts. Make sure key customer and supplier contracts can be transferred or reassigned.
If you also buy the property, a commercial mortgage may be an option, and the freehold SDLT bands on commercial property are 0% up to £150,000, 2% on the next £100,000 and 5% above £250,000 (GOV.UK).
Valuation and negotiation
Price is only one term. Also negotiate what is included, how and when you pay, warranties, and what happens after completion. Lenders usually size a loan against the target’s maintainable profit, often EBITDA, rather than the asking price alone, so an overpriced business can be hard to finance in full even if your deposit is strong (Capitalise). An earn-out can tie part of the price to performance after you take over, which reduces your day-one funding and protects you if the seller’s figures prove optimistic (New Owner).
- Valuation. Have an accountant test the numbers, including any one-off profits and the owner’s own pay.
- What is included. List equipment, stock, intellectual property, contracts and the lease.
- Payment terms. Upfront, deferred or earn-out. See our guide to how to finance a London business purchase.
- Handover. Ask for the seller to stay for an agreed period to introduce customers and staff.
Read More: Guide to Starting a Hotel Business in London: Key Steps and Insights for 2024
Business brokers and where to look
Brokers and online marketplaces list businesses by sector, location and price. iwoca names Daltons, BusinessesForSale.com and RightBiz, and also points to trade contacts and accountants (iwoca). A broker can save time, but ask who pays them and whose interests they represent, check their fees in writing, and still do your own checks. Never treat a listing summary as proof of profit.
Paying for it
Most buyers combine a bank or specialist loan, seller finance and their own cash. The Growth Guarantee Scheme can help a lender say yes, but it gives the lender a 70% guarantee and the borrower stays 100% liable (British Business Bank). Our guide to how to finance a London business purchase compares the routes, deposits and costs, and our page on business loans covers loan types. Keep working capital for the first months after completion, and arrange business insurance from day one.
Lenders ask for a lot of paperwork on an acquisition, because they assess the target as well as you. Start gathering it early, since missing accounts are a common cause of delay.
| Document | Why the lender wants it |
|---|---|
| Business plan and forecasts | Shows how the business will perform and repay the debt under your ownership |
| Three years of the target’s accounts | Shows trading history and profit |
| 12 to 24 months of the target’s bank statements | Checks that cash coming in matches the accounts |
| Your personal financial statement and proof of your own contribution | Shows your savings, income, liabilities and how much of your own money is in the deal |
| Heads of terms and due diligence findings | Show the agreed price and conditions, and what the checks found |
| Your CV or relevant experience | Shows you can run this type of business |
Which sector to buy in
The earlier version of this page made broad claims about tech, sustainability and recovery. We have removed them because they were not sourced. For London, the ONS reported that professional, scientific and technical firms were the main industry behind business births in 2024, at 17.7% (ONS). That shows where new firms are appearing, not where a good buy is. See our top industries for businesses for sale in London guide, and choose a sector you understand.
Common mistakes to avoid
- Skipping due diligence. Unchecked accounts, contracts and tax can hide costly surprises.
- Paying too much. A price based on one strong year or on the owner’s unpaid hours can be too high.
- Ignoring the lease and licences. A great business can lose its value if it cannot keep its premises or licence.
- Forgetting staff. TUPE rules mean existing terms usually carry over, so budget for them.
- No handover plan. Customers and staff often follow the person they know.
- Underfunding the first months. Keep a working capital cushion.
Conclusion
Buying a business in London is a project of months, not weeks. Set clear criteria, decide the deal structure early, check the company, the lease, the licences and the staff position, and agree funding before you sign. Take legal and tax advice. For more practical guides, see the business section at The London Report.
FAQs about buying a business in London
How long does it take to buy a business in London?
Most UK business acquisitions take between 3 and 9 months, with smaller and well-prepared deals at the lower end (iwoca). Funding alone can take four to eight weeks from application (Capitalise).
What is the difference between a share purchase and an asset purchase?
In a share purchase you buy the company itself. In an asset purchase you buy selected assets. They have different legal and tax implications (iwoca), so take advice early.
How much does it cost to buy a business in London?
It depends on the size, sector and location. On top of the price, budget for legal and accountancy fees, lender fees, 0.5% stamp duty if you buy shares (GOV.UK) and working capital. See our guide to how to finance a London business purchase.
Do I need a business broker?
No, but brokers and marketplaces can help you find businesses and manage the process. Ask who pays the broker and whose interests they represent, and do your own checks.
Do employees transfer when I buy a business?
Usually yes. Under TUPE, jobs generally transfer to the new owner with their terms and continuity of employment (GOV.UK). Whether TUPE applies depends on the deal, so ask a solicitor.
Do I pay VAT when I buy a business?
Not always. If an asset sale qualifies as a transfer of a going concern, no VAT should be charged. The conditions are strict (GOV.UK).
Will I pay SDLT on the lease?
If you buy an existing (assigned) non-residential lease, you pay SDLT only on the price paid for the lease, not on the rent. A new lease is charged on both (GOV.UK).
Do I need to transfer licences?
Often, yes, depending on the business. For alcohol, GOV.UK lists a premises licence transfer application (GOV.UK). Check with your solicitor and the local council.
What are the main risks of buying a business?
Inheriting debts, overpaying, losing customers or key staff, and lease or licence problems. Due diligence, warranties and a handover period reduce them.
Editor’s note: what changed in this update
On 18 October 2026 we rewrote this page. We replaced general, unsourced statements about 2025 market trends with UK data and official guidance (DBT, ONS, GOV.UK). We added a step-by-step process, timings, a share versus asset comparison and legal checks, and replaced the Pinterest images with licensed photos. We removed a link from the first paragraph that pointed back to this same page, and the Wikipedia link on seller financing, which our financing guide now covers. We kept our link to the hotel business guide and to The London Report homepage.
Sources
- GOV.UK: Business Population Estimates 2025 (2 October 2025); ONS: Business demography, UK: 2024 (20 November 2025)
- GOV.UK: Business transfers, takeovers and TUPE; GOV.UK: VAT Notice 700/9, transfer a business as a going concern (updated 23 May 2025)
- GOV.UK: Tax when you buy shares; GOV.UK: SDLT rates for non-residential and mixed property; GOV.UK: Get information about a company; GOV.UK: Alcohol licensing
- British Business Bank: Growth Guarantee Scheme FAQs
- Commercial guides (timings, process, deal structure, documents): iwoca, Capitalise, New Owner, Sprintlaw, BuyABusiness
Author Bio
The London Report Editorial Team provides practical business insights, guides and market trends for entrepreneurs across the UK. Our content is designed to help readers make informed and confident business decisions.
Disclaimer
This article is for general information only and is not legal, tax or financial advice. Rules, rates and figures change, so check official sources and speak to a solicitor and an accountant before you buy a business.
Last updated: 18 October 2026
