Shares or assets
This is the first question in every deal, and by the time a solicitor is instructed the parties have often assumed an answer without noticing they were choosing. It is worth choosing consciously, because everything downstream follows from it.
Buying the shares
- You acquire the company with its entire history
- Contracts, licences and permits usually continue undisturbed
- Employees stay where they are, in their existing employer
- Liabilities come too, including ones nobody has found yet
- Simpler to execute, riskier to have bought
Buying the assets
- You acquire selected items, defined in a schedule
- Contracts generally need counterparty consent to transfer
- Employees may transfer automatically with the business
- Historic liabilities generally stay with the seller
- More work to execute, cleaner to have bought
What diligence is actually for
Diligence is often treated as a compliance exercise producing a report nobody reads. It is better understood as price discovery: every finding either adjusts what the business is worth, produces a specific protection in the contract, or tells you to stop.
Where problems usually are
- Title to the shares themselves. Historic transfers that were never properly documented are more common than anyone expects.
- Key contracts with change of control clauses, which let the customer walk on the day you complete.
- Employment, including people who have been treated as contractors for years and are not.
- Intellectual property that the company does not own, typically because a founder or a freelancer created it and it was never assigned.
- Tax, and in particular positions taken historically that have not yet been tested.
- Litigation and unpaid debts, including the ones that have not been threatened yet.
How a deal runs
- 01Week 1
Heads of terms
Mostly non-binding, but it fixes the commercial shape and it is far easier to agree the difficult points here than in a marked-up contract. Exclusivity and confidentiality are binding and are worth getting right.
- 02Weeks 2–6
Due diligence
Legal, financial and, where relevant, technical. Scoped to what actually matters at the size of the deal rather than to a standard checklist, because diligence can easily cost more than the risk it is looking for.
- 03Weeks 4–8
The contract
Share purchase or asset purchase agreement, disclosure letter, and whatever the diligence produced: price adjustments, retentions, specific indemnities. The disclosure letter is where most of the real negotiation happens.
- 04Completion
Completion, and after
Signing, transfer, registration and filings. On a cross-border deal the post-completion registrations are frequently where a rushed transaction unravels.
Cross-border deals
Where the target is Lithuanian and the buyer is British, or the reverse, the usual arrangement is a firm on each side of the deal and a firm on each side of the border. That is four sets of fees, and the two advising the same party frequently disagree about which of them owns the risk.
Being admitted in both means the diligence, the contract and the post-completion registrations are handled on one file. Lithuanian share transfers involve formalities that have no English equivalent, and completion mechanics have to be built around them rather than discovered at signing.
What it costs
Deals are quoted by stage, with a written estimate before each stage begins, because scope is genuinely unknown until diligence starts. Heads of terms and a diligence scoping exercise can usually be fixed. Where a deal is small enough that a full diligence exercise would cost a meaningful fraction of the price, I will say so and propose a narrower scope rather than run the standard process.
Common questions
Should I buy the shares or the assets?
As a buyer, assets are usually safer, because historic liabilities generally stay with the seller. As a seller, shares are usually preferable, because they achieve a clean exit from the business and its history. The choice affects diligence, the contract, consents and often the price, so it is worth making deliberately at the outset.
What is the difference between a warranty and an indemnity?
A warranty is a statement that something is true, and breaching it gives rise to a damages claim you have to prove and quantify. An indemnity is a promise to reimburse a specific identified loss, pound for pound. Indemnities are for problems you already know about; warranties are for the ones you do not.
How long does an acquisition take?
For a straightforward private company, typically two to four months from heads of terms to completion. Diligence findings, regulatory consents and financing are what extend it. Cross-border deals add time for local formalities and registrations rather than for the negotiation itself.
Do employees transfer with the business?
In a share purchase nothing changes, because the employer is the company and the company has simply changed hands. In an asset purchase, employees assigned to the business being sold may transfer automatically by operation of law, along with their existing terms and their continuity of service. It is not optional and it is frequently overlooked.
Is due diligence worth it on a small deal?
Scoped diligence is. Full diligence on a business worth a few hundred thousand can cost a serious fraction of the price, which helps nobody. The sensible approach is to target the areas that could actually destroy the value, take a view on the rest, and cover the residue with warranties.
Can you act on both the UK and Lithuanian sides of one deal?
For one party, yes, and that is the point of the practice. I am admitted in England and Wales and registered with the Lithuanian Bar, so a single retainer covers both sides of a cross-border transaction. Acting for both buyer and seller is a different question and is generally not permissible.
This page states the law of England & Wales and Lithuania as at 18 August 2026. It is general information, not advice on your matter, and reading it does not create a solicitor-client relationship.