Legal Fees for Selling a Business in 2025: Real Figures Revealed

Usually, the sales process would involve various professionals that specialise in merger and acquisition transactions. These may involve businesses brokers, lawyers & accountants. In this blog, we will focus on the legal (solicitors’) fees, although we will briefly start with an overview of the related costs:

Business broker fees for selling a business

Business brokers offer services before, during and following the sale. Among them are: valuations, finding a buyer, support with obtaining documents, assistance at meetings, negotiation and final transition support. Brokers will usually charge an upfront advertising fee of a few thousand pounds (£2,000 to £10,000). Brokers may also charge success fees, which vary based on the broker’s experience and the size of the business being sold. The success fee is usually 1% to 3% of the sale price.

Accountancy Fees

Your accountant will likely be involved when selling your company. They will help answer the buyer’s due diligence questions, advise you on the tax implications of selling, and help with the completion accounts post-sale of your company (if relevant). Again, this will be a couple of thousand pounds (usually £2,000 to £7,000).

Solicitor fees for selling a business

A solicitor will support you throughout the sale of your business. A good solicitor will help you manage the deal, liaising with the relevant parties to ensure that the deal proceeds smoothly.

The average solicitor fees for this process are start around £7,000 + VAT and, if you are selling the business for more than £5m, then usually charge about 1% of the sale price. More complex transactions may result in higher charges and each deal will need to be assessed on a case-by-case basis. See below the factors that influence the legal fees when selling a business.

Factors Influencing Legal Fees

• Complexity of the Transaction: The more complex the sale (e.g., involving multiple stakeholders, intellectual property, or regulatory hurdles), the higher the legal fees. Complex transactions typically require more time and specialised expertise.

• Size of the Deal: Larger deals tend to incur higher legal fees as they often involve more due diligence, paperwork, and negotiations. Smaller transactions may have fewer legal complexities, resulting in lower fees. Small deals are that where the purchase price is less than £1m.

• Location of the Law Firm: Legal fees can vary based on the law firm’s location. For instance, firms in London’s city centre may charge more than those in smaller cities or regions due to higher overhead costs.

• Whether Communications Are Billable: Some law firms charge for evert communication, such as emails, phone calls, or meetings. This can add up quickly if frequent communication are needed throughout the transaction process.

• Whether Negotiations Are Billable: Negotiating the sale’s terms, which is often one of the most time-consuming parts of the process, may be billed separately. This could significantly impact your overall legal expenses.

• Timeline: The length of time required to complete the transaction can affect legal fees. An accelerated timeline might involve additional resources, potentially raising costs, while delays could also drive up the total fees. For smaller deals, a good timeline is 3-4 months.

• Commercial Property Transactions: Transactions involving commercial property can significantly impact legal fees due to the complexity and financial implications. These transactions often require expert legal guidance to navigate the associated legal considerations.

Indicative vs. Fixed Fee Quotes

Law firms typically offer two types of fee structures: indicative quotes and fixed fee quotes.

• Indicative Fee Quotes: These quotes provide an estimate of the legal fees but are not guaranteed. While they may seem lower initially, they often end up exceeding the original estimate as additional billable items—such as communications and negotiations—are added. For sellers, this structure may lead to unpredictable costs as the sale progresses.

• Fixed Fee Quotes: Fixed fee quotes may sometimes appear higher at first but often provide better cost certainty. They cover all services, including communications, and are usually guaranteed not to exceed the quoted amount. In most cases, a fixed fee arrangement ends up being more affordable than an indicative quote because it protects you from unexpected costs and ensures your legal budget stays under control. Within the fixed-fee structure, there may be two variations. Make sure to understand which your law firm is offering you:

  • Fully-fixed: So long as the assumptions made when offering you the fixed fee remain the same, then the fee remains the same. This is what we at Zoppi & Co offers.

  • Fixed but capped: The fees are fixed unless more hours are spent on your matter than anticipated – in which case you will be charged more. At Zoppi & Co, we don’t call this a fixed fee!

Definitive Answer: Legal Fees For Selling a Business

It depends! On the lower end, legal fees usually end up being a minimum of £8,000 + VAT for smaller deals, but can be in the tens of thousands.

The below is a quote that Zoppi & Co often gives to sellers, made on the following assumptions (not an exhaustive list):

• The company is a limited company registered in England and Wales or Scotland (the Target).

• The sale price is between £500k and £1m.

• The deal is due to complete in approx. 3 months.

• Detailed heads of terms have been signed.

• The deal is structured as a share sale.

• The buyer has instructed specialist solicitors.

• The Target is not regulated or part of a group of companies.

Total:

£9,000 + VAT

£7,000 + VAT

Our fees are fixed and total and include:

• Reviewing and negotiating the following documents:

  • SPA;

  • Board minutes;

  • Shareholder resolutions;

  • Share indemnities;

  • Stock transfer forms;

  • PSC notifications;

  • Director consents and resignation letters; and

  • Powers of attorney.

• Drafting and negotiating a Disclosure Letter, to qualify the SPA’s warranties;

• Communicating with you, the buyer’s solicitors and the buyer; and

• Liaising with you to complete the virtual data room.

Included at no extra cost to you:

• Unlimited time spent negotiating the SPA, disclosure letter and ancillaries.

• Unlimited revisions on draft documents until 100% satisfied.

• Unlimited calls, emails and other communications.

We are so confident in our packages that we offer a price-match guarantee: we will match, pre-engagement, any like-for-like quote.

What Happens if the Deal Falls Through?

If the sale of your business is unsuccessful, you may still be liable for certain legal fees. However, some law firms offer flexible arrangements to minimise your financial loss in the event of a failed transaction. Here are three common scenarios:

1. Credit Toward Future Deals: Some firms, like Zoppi & Co, offer to credit a portion of the legal fees you’ve already paid toward your next deal if the current transaction falls through. This can be a valuable benefit if the current deal fell through but you still want to sell.

2. Negotiated Legal Fees: Certain firms, including Zoppi & Co, are open to negotiating their legal fees. If your deal is aborted, you may be able to work out a mutually agreeable fee structure with your law firm, reducing the financial burden.

3. Partial Charge for Aborted Deals: Many law firms, such as Zoppi & Co, will only charge you a portion of their fixed fee if the deal aborts, helping you limit costs when the transaction doesn’t go as planned.

Minimising Costs When Selling a Business

Minimising costs when selling a business is essential to maximise the net proceeds from the sale. Here are several strategies to help you keep expenses in check:

1. Prepare Accurate and Organised Financial Statements: Well-prepared financial statements can significantly reduce accountancy fees and ensure your business is valued correctly. Accurate records streamline the due diligence process, saving time and money.

2. Hire a Professional Appraiser or Business Broker: Engaging a professional appraiser or business broker can help you achieve a fair business sale price. These experts can provide realistic valuations and facilitate a smooth sale process, often justifying their fees through the value they add.

3. Use a Fixed-Fee Structure: Opting for a fixed-fee structure with your solicitor can provide cost certainty. This approach helps you avoid unexpected legal costs and ensures you know exactly how much you will be paying for legal services.

4. Negotiate with the Buyer: Effective negotiation can help reduce due diligence and investigation fees. By reaching a mutual agreement on who bears these costs, you can ensure a more favourable financial outcome.

By implementing these strategies, you can minimise the costs involved in selling your business, ensuring you receive the best possible price and that the sale process is efficient and successful.

Tax Implications of Selling a Business

Understanding the tax implications of selling a business is crucial to avoid unexpected liabilities and to maximise your net proceeds. The tax landscape can be complex, influenced by factors such as the type of business, the sale price, and the jurisdiction’s tax laws.

One of the primary taxes to consider is capital gains tax, which applies to the profit made from the sale of your business. The rate of capital gains tax varies depending on your income tax band. However, Business Asset Disposal Relief (formerly known as Entrepreneurs’ Relief) can significantly reduce the amount of capital gains tax you owe, making it a valuable consideration for business owners.

To navigate these complexities, consulting with a tax advisor or accountant is essential. They can provide tailored advice and support, helping you understand your tax liabilities and plan accordingly. By being proactive about the tax implications, you can ensure a smoother sale process and better financial outcomes.

Conclusion

Legal fees are an essential consideration when selling a business. By understanding the factors that influence legal costs and choosing a fee structure that aligns with your needs—whether indicative or fixed—you can better manage your budget and avoid surprises. Additionally, if your deal doesn’t close, firms like Zoppi & Co offer various options to minimise your financial exposure. With careful planning and a transparent fee arrangement, you can navigate the sale process more smoothly and cost-effectively.

Frequently Asked Questions

How much do solicitors charge to sell a business?

Solicitors usually charge approx 1% of the sale price, or a minimum of £8,000 + VAT (whichever is highest).

Do I need a solicitor to sell my small business?

To avoid issues and being taken advantage of, it is highly advisable to appoint a solicitor.