Who pays legal fees when selling a company?

For many company owners preparing a sale, one of the first questions that arises is: Who pays the legal fees when selling a business? In company sales, legal costs can quickly add up and, in some cases, spiral well beyond original estimates.

But it doesn’t have to be that way because if you select the right adviser to oversee your company sale, then you can take advantage of a legal fees model which offers distinct advantages compared to hiring an independent solicitor.

Throughout this guide, we will explain:

• Who pays legal fees when selling a company
• How much are legal fees for selling a company
• What happens to legal fees if a deal falls through
• Legal documents needed to sell a company
• How a company seller can minimise legal fees and maximise value 

Do Sellers Pay Legal Fees for Selling A Business?

In a typical company sale, each party is responsible for paying its own legal fees. That means as the seller, you will usually need to appoint your own solicitor to draft and negotiate legal documents, manage due diligence and represent your interests throughout the deal. 

These legal services are essential, but they come at a cost. And if the sale falls through, in most cases, those fees are still payable. You will find that various legal service providers offer a range of fee structures, so make sure you understand them all and choose the one you find most suitable.

Fee Structures Explained: What Should Sellers Look Out For?

Legal fee structures can vary between firms, and understanding how they work is key to avoiding hidden costs. Here’s a breakdown of the most common approaches sellers encounter:

Indicative Quotes
Initial estimates that often appear low, but as the process unfolds, costs can exceed projections. This may work for you if your company sale evolves in a straightforward, seamless manner, but could become expensive if complications arise.

Fixed Fee Quotes
A set price established in advance. These often include exclusions/standard scope clauses, increasing costs based on workload. Again, if there is minimal extra work for the solicitor this option may well suit the company seller, but be mindful that extra charges could occur. 

Fully Fixed Fees
Means you won’t pay more, no matter how long the deal takes. These are rare and require a deep understanding of the business. This option may be presented as a percentage of the final sale value, so could mean a higher outlay than the other methods, but you will know exactly where you stand at every point.

Fixed but Capped Fees
Puts an upper limit on billing, but you may still be overcharged depending on how much work is involved. The pros and cons are similar to fully fixed fees, with the difference being that if you budget for the maximum amount the final payment may ultimately be less.

How Much Are Legal Fees for Selling A Company?

Legal fees for selling a company do not come with a one-size-fits-all answer. They can vary significantly depending on deal value, complexity and the experience level of your solicitor. Here’s a general breakdown of what sellers can expect: 

These figures can escalate depending on factors such as: 

• Number of employees
• Intellectual property 
• Length of the negotiation process
• Whether you’re selling shares or assets
• Seniority and the hourly rate of your solicitor 

Often, these costs are payable despite the outcome of the business sale. However, it is worth bearing in mind that you also have the opportunity to work with an adviser whose approach provides cost certainty and legal fees which are only payable if the transaction completes.

What Happens to Legal Fees If A Deal Falls Through?

In many UK company sales, you could still be liable for legal fees even if your deal does not complete.

Most traditional solicitors operate on a time-spent model, which means:

• You’re charged by the hour or on a partial fixed-fee basis
• All legal work is billable, regardless of outcome
• If the buyer pulls out or negotiations collapse, you’re still left with the legal bill

Remember, there is a variety of legal fee options available to you, as explained above. Among these is the choice of a fully inclusive legal fees model where the costs will be transparent from the outset, and only payable if the deal is successfully completed.

Legal Documents Needed to Sell A Company

Selling a company in the UK is about more than just finding a buyer. It requires careful legal preparation and a suite of formal documentation to ensure the deal is compliant, secure and in your best interests. 

Here are some key legal documents needed to sell a business: 

• Heads of Terms (HoTs) – This outlines the main terms of the sale, such as price, deal structure, timelines and key conditions. While not legally binding, the HoTs helps set expectations early and prevent later disputes. 
• Non-Disclosure Agreements (NDA) – NDAs are crucial for protecting sensitive business information. Before confidential details are shared, buyers must sign this to ensure data, customers and operations are protected. 
• Sale and Purchase Agreements (SPA) – The SPA is the central legal document in the transaction. It finalises the terms, legally transfers ownership and includes key clauses around warranties, liabilities and post-sale restrictions. 
• Property Agreements – If the company owns or leases a property, relevant contracts and leases must be reviewed and transferred appropriately. This process often involves land registry checks, landlord approvals and formal assignment documentation. 

Employment Contracts & TUPE Compliance – A buyer will need clarity on staff terms, benefits and liabilities. If employees are transferring under TUPE guidelines, the legal process must follow strict compliance to protect the seller and buyer from claims.

How a Company Seller Can Minimise Legal Fees and Maximise Value

Selling your business doesn’t need to come with unpredictable legal costs. At KBS Corporate, our fully integrated legal service means no legal fees are payable unless your sale completes – a unique, seller-first model rarely offered by traditional solicitors.

Our specialist M&A legal team handles everything:

• Heads of Terms, NDAs, due diligence and the Sale and Purchase Agreement
• Full negotiation and document management
• Ensuring every legal step aligns with your commercial goals

Our approach reduces risk, avoids delays and helps maximise your business’s sale value – all with cost certainty, which will be fully transparent from the outset and will not deviate during the transaction process.

Clients benefit significantly from the fact there are no up-front fees or hidden surprises. Jerry Holmes, founder of Hollyport Logistics, posted a 5-star review on Trustpilot in which he said: “I closed the sale of my company and it proved that the KBS contract cost and their recommended solicitor at a fixed fee were justified. The solicitor was brilliant and I will always be grateful for their guidance and support.”

Explore our case study for more details

With over 25 years’ experience, unrivalled buyer reach and no-sale, no-legal-fee protection, KBS Corporate is the smart choice for your exit strategy support. Read our full guide on how to exit your company successfully.

Ready to sell with confidence? Contact us today for an initial no-obligation, confidential discussion about your company exit requirements.