Here at Jaswal Johnston, we have supported many clients through their journey of establishing, growing, merging, scaling and exiting their businesses. We have worked with many clients in all verticals, from the early days of custom websites, and eBay shops to the development of hosted eCommerce platforms such as Shopify, BigCommerce, Squarespace and WooCommerce.

We have a broad knowledge of legal skills and knowledge that can support you with your business goals. Whether that is raising equity to grow and expand your eCommerce business, a partial exit involving a sale of a majority or minority stake, mergers and acquisitions to help you grow faster or a full exit to an interested party; we’ve handled a large number of transactions and have the knowledge and expertise to support you on your journey.

We have an up to date view of the ever changing market and understand the growing and ever changing landscape of multi-channel eCommerce.

How can Jaswal Johnston support you to sell your Shopify or ecommerce business?

We can offer support to:

  • UK based eCommerce companies and private sellers looking to sell their business to UK, US or European eCommerce Aggregators
  • UK eCommerce businesses looking to exit their company to private equity and family offices
  • UK eCommerce businesses looking for funding support and legal advice with venture capital partners
  • eCommerce and Shopify aggregators looking for a reliable and knowledgeable UK legal representation to help with the acquisitions of UK eCommerce companies
  • Selling your Shopify business to another Shopify seller

The clients that we have supported, have sold to tactical buyers (in industry) and eCommerce aggregators. The largest of these include Thrasio, Razor Group, Branded, Elevate Brands, Olsam Group and Berlin Brands.

Guiding You Through The Sales Process

We understand that for most sellers, this will be the first time that you have sold a business. Our team, led by Tony Johnston is here to:-

  • Help you to understand the processes involved with any deal, in straight forward and simple to understand language.
  • Always act in your best interests, and negotiate to get you the best possible deal
  • Prepare everything for sale to ensure that you have the correct contracts, paperwork, policies and procedures in place
  • Negotiate the purchase agreement, the key document governing the sale
  • Support you with any consultancy agreements or earn out contracts
  • Ensure you provide full and proper disclosure to protect you against future claims including setting up a data room containing all of the documentation and information to be passed to the buyer or other party.
  • Supply Escrow services if required.
  • Putting you in touch with specialist tax advisers

How does the sale process work when selling my Shopify business?

Most sellers will opt to sell the shares in the Company for tax reasons and the Shopify or Ecommerce accounts which belong to the company will be included in the sale.

The typical process is as follows:-

Seller – Decides to sell their business and will speak with numerous buyers.

Buyer – Each buyer will request detailed financials about the business, and access to the various systems that are in place to verify numbers provided.

Buyer – The buyer(s) will typically present their offer(s) to the Seller, through a Letter of Intent.

Seller – The seller will review the offers made, and make a decision on the most suitable offer for them. An initial deal and term sheet is agreed.

Each side will sign an NDA.

Buyers & Sellers – Will then appoint legal representatives to act on their behalf.

Buyer – The Buyer will present the Seller with an SPA (share purchase agreement). This is a formal legal document and sets out the offer, the price to be paid, any specific provisions relating to that deal and any restrictions on the Sellers.

All – The SPA will be negotiated by the legal teams on both sides and will take several “turns” to agree a final version. There will also be other documentation to draft and negotiate including a disclosure to be prepared by the Seller. Our legal team support you with this.

When both parties are in agreement and the documents are agreed, all of the documents are signed, and the money will either be paid to us as the Seller’s solicitors or be placed into an Escrow.

If monies are placed into escrow, they will be released on the written instructions of the Buyer and Seller.

What will my legal fees be to sell my Shopify or Ecommerce Business?

The largest factors that affect the fees involved are the size of the business and the complexities of the sale. We have a transparent fee structure and will only charge you for the time spent on your deal. Before we undertake any work, we will give you a cost estimate based on our initial discussions.

As a guideline, our fees are typically between £20,000 – £35,000 + VAT.

Where possible, we can agree a fixed fee with you subject to certain limitations.

If you are a UK company, you should use a UK lawyer

It is recommended if you are a UK Limited Company to sell your business under UK law using a UK legal professional.

Failure to do this and agreeing to a US legal system or other territory can put your business, valuation and future earnings at serious risk.

The main reasons for this are:

  • There is less likelihood of you being sued and subject to legal proceedings in other territories
  • English courts award tend to award much lower damages than American courts.
  • The structure of legal costs in this country means that buyers are less likely to start proceedings than they are in the United States.

Types of eCommerce purchase

Many of the largest eCommerce and Shopify aggregators use US legal terminology to describe the types of purchase.

Asset Transfer – This is typically where the buyer buys the assets of the business but not the legal entity. For example, the stock, trademarks, photography, brand IP and website would be purchased by the buyer but they do not purchase the physical company so would not be responsible for any tax liabilities, PAYE, staff, buildings or outstanding contracts.

This is the most typical type of sale for US companies, buying US companies. However we recommend against this approach for UK companies. This may however be suitable for smaller stores or individuals running multiple brands.

Stock Purchase – A stock purchase is where the shares in the business are purchased. The assets of the business, stock, Intellectual Property, bank accounts, cash in the business etc would all be purchased and the buyer would take ownership of any past and future liabilities.

This type of purchase, whilst more complicated, brings significantly greater rewards for UK sellers and is more tax efficient than just selling the assets.

Want to discuss selling your Shopify or eCommerce company today?

Call Tony on 0207 317 1542 / 07703 498746  or email