{"id":198844,"date":"2026-07-16T06:10:32","date_gmt":"2026-07-16T05:10:32","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=198844"},"modified":"2026-08-28T04:41:42","modified_gmt":"2026-08-28T03:41:42","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

Deferred consideration in a UK share sale means the buyer pays part of the purchase price after completion. The payment may be a fixed sum on a set date, a series of instalments, or an earn-out linked to performance. Deferred consideration shifts risk from the buyer to the seller, because the seller becomes an unsecured creditor for the outstanding amount. The share purchase agreement carries the protection. An acceleration clause makes every outstanding amount payable on default or insolvency. A default interest clause prices late payment. Security, such as a charge, a debenture or a parent company guarantee, backs the promise to pay. (103 words)<\/em><\/p>\n\n\n\n

This article explains how deferred consideration works in a UK share sale, the clauses that protect a seller, how to structure an earn-out, and how deferred amounts affect stamp duty.<\/p>\n\n\n

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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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