What Are Completion Accounts?

Completion accounts are accounts that are produced at an agreed time after the formal completion date. They can be a useful tool in situations where the initial purchase price was produced by use of “old” Profit and Loss and Balance Sheet information. It is of particular use in situations where a business or company is experiencing changeable trading conditions. It might be that a set payment is made at formal completion and then an adjustment is made once the completion accounts are produced.

They nearly always form part of a share sale to calculate a net asset value which prompts a balancing payment.

Our Top Tip: involve your solicitor and accountant at an early stage in working out how the completion accounts will be calculated and taken into account in the drafting of the sale agreement.

About the Author: Martin Truman

Solicitor and Managing Director at Truelegal Solicitors: Martin has spent 25+ years advising entrepreneurs and business owners. With over 3,100 small and mid-size business sale and purchase transactions completed under his watch, he is confident that Truelegal has the toolkit to deal with most issues that buyers and sellers of UK businesses encounter. Realising the full value of a business for its owner on exit is his passion.