The twenty four sections
The pack is twenty four sections. They are the questions a buyer, or the solicitor acting for one, works through before completing a purchase. Seeing them all at once is daunting, so this article says what they cover and which order actually works.
What the sections cover
The company itself. Incorporation, the constitutional documents, the share register and who controls the company.
The money. Trading history, management accounts, debtors, creditors, bank accounts, loans, and the position with HMRC.
The operations. Customers, suppliers, contracts, stock, property, plant and equipment, and the systems the business runs on.
The people. Employees, contracts of employment, payroll and pensions.
The risk. Litigation and disputes, insurance, data protection, intellectual property and regulatory position.
Which ones a buyer reads first
Ownership, because a buyer cannot buy what you cannot prove you own. A share register that does not reconcile stops a deal before anything else is looked at.
Trading history and management accounts, because that is where price comes from. The most common reason a price falls is management accounts that do not reconcile to the accounts filed at Companies House.
Contracts, because a customer contract that ends on a change of control is a business that may not survive the sale.
Litigation, because a surprise here late in a process poisons everything that came before it.
The order that works
Start with the sections you can answer from documents already on your desk, which is usually incorporation, ownership and bank accounts. They move the score quickly and they cost nothing but time.
Then take the money sections, which need your accountant and therefore need lead time.
Leave the sections needing somebody else to send you something until last, but start asking for those documents on day one.
You do not have to finish in one sitting
Every section saves on its own. Nothing is lost by answering three fields and coming back, and the score updates as you go, so progress is visible rather than theoretical.