Due diligence is where the deal you thought you'd agreed gets tested line by line, and asset transfer is where ownership actually changes hands — understanding both stages in advance prevents nasty surprises and helps keep a deal on track to completion.
The typical stages of e-commerce due diligence
Due diligence in an e-commerce acquisition typically runs across several parallel workstreams — financial due diligence (verifying reported earnings and normalised adjustments), commercial due diligence (assessing customer concentration, marketing channel dependency and competitive position), legal due diligence (reviewing contracts, IP ownership and corporate structure), and operational due diligence (assessing fulfilment, supplier relationships and technology infrastructure). For smaller deals these workstreams may be run informally by the buyer directly; for larger transactions, buyers frequently engage specialist third-party due diligence firms.
The process typically takes anywhere from a few weeks for a straightforward smaller acquisition to several months for a larger, more complex transaction involving multiple advisors on both sides.
Common areas that cause delay or renegotiation
Certain issues recur consistently as sources of delay or price renegotiation during due diligence — undisclosed customer concentration (a large proportion of revenue from a small number of accounts), platform account risk (particularly for Amazon-dependent businesses, where account suspension risk or policy violations are heavily scrutinised), unclear IP ownership (trademarks or product designs not properly registered or assigned to the trading company), and inventory or margin discrepancies uncovered against the represented figures.
- Customer or channel concentration above roughly 20-30% of revenue typically triggers deeper scrutiny and can affect the multiple offered.
- Amazon or marketplace account health, policy compliance history and any past suspensions are examined closely for platform-dependent businesses.
- Trademark, domain and product design ownership must sit clearly with the trading entity, not a founder personally or an unrelated company.
- Any pending litigation, HMRC enquiry or unresolved customer dispute typically needs full disclosure and can affect warranty negotiations.
Share sale versus asset sale: the fundamental choice
A UK business sale is structured as either a share sale (the buyer acquires the shares of the trading company, taking on the company with all its assets, liabilities and history intact) or an asset sale (the buyer acquires specific assets — stock, IP, contracts, sometimes employees under TUPE — leaving the seller's original company, and any liabilities not explicitly transferred, behind). Buyers often prefer asset sales because they can more precisely choose what they're taking on and avoid inheriting unknown historical liabilities, while sellers often prefer share sales, partly because Business Asset Disposal Relief and cleaner tax treatment typically apply more straightforwardly to a share sale.
Mechanics of transferring a UK company via Companies House
In a share sale, ownership transfers via a stock transfer form and an update to the company's register of members, with the change ultimately reflected in the confirmation statement filed at Companies House — while Companies House itself doesn't approve or process the substance of the transaction, the filings create the public record of the change in ownership. Directors are typically also changed at completion, with new director appointments and any resigning director's termination filed promptly to keep the public record accurate and to formally hand over statutory control of the company.
TUPE and employee considerations in an asset sale
Where an asset sale involves employees continuing to work in the transferred business, the Transfer of Undertakings (Protection of Employment) Regulations, commonly known as TUPE, generally apply, automatically transferring affected employees to the buyer on their existing terms and protecting them from dismissal because of the transfer itself. Both buyer and seller have specific information and consultation obligations under TUPE, and getting this wrong can create significant employment law liability, so involve an employment solicitor early wherever an asset sale involves any employees.
Keeping the deal on track through to completion
Due diligence findings almost always lead to some renegotiation, whether through a price adjustment, revised warranties, or an escrow holdback against specific identified risks — treat this as a normal part of the process rather than a sign the deal is failing, while still pushing back firmly on demands that go beyond what the underlying issue genuinely justifies. Maintaining open, prompt communication with the buyer's team throughout diligence, and having your own advisors respond quickly to information requests, does more than almost anything else to keep a deal moving toward a timely completion.
Related Considerations for UK Retailers
Getting navigating due diligence and asset transfer when selling right is rarely a one-off task — it tends to need revisiting as the rest of the business changes around it. This connects directly with Navigating UK Trade Shows and Wholesale Markets, which walks through the practical detail.
For related reading: Many of the same principles come up again in Navigating UK E-Commerce Loans, Grants and Venture Capital, which is worth bookmarking for later. It's worth reading this alongside Navigating the UK Consumer Contracts Regulations and Statutory Return Windows before making a final decision.