Regulatory & Compliance

Regulatory compliance is a key consideration in any business sale. Buyers want to know that the company they are acquiring is fully compliant with relevant laws and industry standards. Gaps in compliance can slow down due diligence, reduce valuation, or even stop a deal from progressing.
 

Industry-Specific Compliance Checks

Depending on the sector, different compliance requirements may apply. Common areas include:

• Health & Safety: Up-to-date risk assessments, policies, and staff training records.

• Environmental Standards: Evidence of proper waste management, emissions control, and environmental permits (if relevant).

• Engineering & Technical Standards: Accreditation with recognised bodies, equipment testing and maintenance records, and certification of works carried out.

Having documentation ready in advance reassures buyers and makes due diligence smoother.
 

FCA or Competition Law Considerations

While not relevant for all businesses, certain deals may trigger additional requirements:

• FCA Regulation: Businesses in financial services or handling client funds may need specific approvals. Buyers will want to check that regulatory obligations have been met and licences are current.

• Competition Law: Larger transactions may be subject to review if they could affect competition in the market. Though rare for small and medium-sized businesses, it can be a factor in certain industries.

Even if these areas don’t apply directly, awareness of them signals professionalism to a potential buyer.
 

Why Compliance Can Affect Valuation and Deal Speed

Non-compliance can have a direct impact on both valuation and the likelihood of a deal completing:

• Valuation impact: Buyers may reduce their offer to reflect the cost of bringing the business up to standard.

• Deal delays: Missing documentation or unresolved issues often prolong the due diligence process.

• Risk allocation: Buyers may demand stronger warranties and indemnities if compliance is uncertain, increasing the seller’s potential liabilities.

A business that is visibly compliant and well-documented gives buyers confidence, reduces risk, and can support a stronger valuation.
 

Final Thoughts

Compliance may not always feel like the most exciting part of preparing for a sale, but it plays a critical role in protecting value and ensuring a smooth transaction. Addressing these areas early helps demonstrate professionalism and reduces the chance of last-minute surprises.
 

Note: This overview is for general guidance only and should not be considered legal advice. Professional advice should always be sought regarding regulatory and compliance matters specific to your industry.