{"id":198844,"date":"2026-07-16T06:10:32","date_gmt":"2026-07-16T05:10:32","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=198844"},"modified":"2026-07-16T06:12:51","modified_gmt":"2026-07-16T05:12:51","slug":"deferred-payments-in-share-sales","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/corporations\/deferred-payments-in-share-sales\/","title":{"rendered":"Deferred Payments in Share Sales: Key Legal Issues"},"content":{"rendered":"\n

When selling a company<\/a>, buyers may seek to defer part of the purchase price instead of paying it all at completion. Deferred consideration may be payable on a future date, in instalments, or upon certain events. While this can facilitate a transaction, it also shifts risk to the seller. This article explains how deferred consideration works and the key legal issues to consider.<\/p>\n\n\n\n

Deciding on Your Sale Valuation and Structure<\/h2>\n\n\n\n

The first step in any share sale is agreeing on the valuation. You must then decide how and when the buyer will pay, whether the price is fixed or adjustable, and whether security or set-off rights apply.<\/p>\n\n\n\n

Some buyers will pay the full purchase price at completion, while others may seek deferred payments or link part of the price to future performance. The appropriate structure will depend on the parties’ commercial objectives, funding and risk allocation, with tax considerations also playing an important role.<\/p>\n\n\n\n

What Are Deferred Payments?<\/h2>\n\n\n\n

deferred or deferred payments are where the buyer pays part of the purchase price after completion, which could be a fixed amount on a future date or in instalments over an agreed period.<\/p>\n\n\n\n

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In some cases, the buyer will make later payments only if the business achieves agreed targets. In other cases, the deferred element is fixed and unconditional.<\/p>\n<\/div>\n\n\n\n

If the deferred amount is fixed, you must ensure that your share purchase<\/a> agreement clearly states the exact payment dates and amounts. Clear drafting in your contract can help reduce the risk of payment related disputes.<\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

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