What due diligence should I do before buying a UK limited company?

At minimum: check Companies House for status, filing history, and director changes. Check the charges register for secured creditors who have first claim on assets. Search The Gazette for insolvency notices. Check the directors across ALL their other companies for patterns of failure. Verify the accounts match what the seller claims. Check TrustOnline for CCJs. Check HMRC defaulter list. A Forensic Report from RecoupIQ (£167) cross-references corporate filings, charges, Gazette notices, and director networks in one search.

What are the risks of buying a limited company?

The main risks are: (a) hidden liabilities not disclosed by the seller (debts, pending litigation, tax owed), (b) assets that are charged to a lender (you buy the company but the assets belong to the bank), (c) directors with a history of running companies into the ground and starting again (phoenix pattern), (d) overvalued assets or understated liabilities in the accounts, (e) contractual obligations (leases, employment contracts) you inherit.

Should I buy the shares or the assets of a limited company?

Buying shares means you acquire everything: assets, liabilities, contracts, employees, tax history. Buying assets means you cherry-pick what you want and leave the liabilities behind. Asset purchases are safer but more complex (you may need to novate contracts and TUPE employees). If you are buying shares, due diligence is critical because you inherit ALL liabilities, including ones the seller has not disclosed.

How do I check if a company has hidden debts before buying?

Check: (a) the charges register at Companies House (shows secured loans), (b) TrustOnline for CCJs (£6 per search), (c) The Gazette for insolvency notices and petitions, (d) HMRC tax defaulter list, (e) the accounts for creditor balances significantly higher than reported, (f) the directors other companies for patterns of unpaid debts. RecoupIQ checks all of these except CCJs in a single Forensic Report (£167).

What is a phoenix company and why does it matter when buying?

A phoenix company is when a director allows one company to fail (often leaving creditors unpaid) and immediately starts a new company doing the same business. If you are buying from a director who has a trail of dissolved companies, you may be buying into a pattern. The company you acquire may already have liabilities that will surface after completion. RecoupIQ detects phoenix patterns by mapping the director network across all their current and historical companies.

Can I monitor a company I am about to buy?

Yes. If you are in a due diligence period before completion, you can set up monitoring alerts on the target company. RecoupIQ monitoring notifies you within 24 hours of any change: new charges filed, gazette notices, director resignations, or status changes. This means if the company deteriorates between your offer and completion, you find out immediately rather than discovering it after you have paid. Monitoring starts from £19.99/mo.

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Acquisition Due Diligence

Buying a Limited Company? Check It Before You Sign.

Every year, UK buyers lose hundreds of thousands of pounds acquiring companies with hidden liabilities, phoenix directors, and charged assets. The due diligence that would have saved them takes under 90 seconds and costs £167.

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Real case: £500,000 lost, £1,000,000 owed

A buyer acquired a UK company without checking the directors' history. After completion, they discovered the previous directors had a pattern of running companies into insolvency, leaving creditors unpaid, and starting again under new entities. The acquired company had undisclosed liabilities exceeding £1 million. The buyer lost their entire £500,000 investment. A £167 Forensic Report would have shown the director network pattern before they signed.

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The 8-point acquisition due diligence checklist

Before you buy any UK limited company (shares or assets), check every one of these. Skipping even one can cost you everything.

Companies House status and filing history

Confirm Active status. Check for any proposal to strike off, administration, or liquidation. Look at filing consistency: has the company filed on time every year, or are there gaps?

Charges register (secured creditors)

Check what charges exist against the company. A fixed charge means a specific asset (property, equipment) is pledged to a lender. A floating charge means ALL assets are pledged. If assets are charged, you may be buying a company whose assets already belong to someone else.

Director history across ALL their companies

This is where most buyers fail. They check the target company but not the directors' OTHER companies. A director with 4 dissolved companies and 2 in liquidation is a pattern, not bad luck. RecoupIQ maps the full director network automatically.

Gazette notices (insolvency proceedings)

Search The London Gazette for any winding-up petitions, administration notices, or compulsory strike-off notices. If there are active proceedings, you are buying a company that may be dissolved before you complete.

CCJ history (county court judgments)

Check TrustOnline (£6) for any CCJs against the company. Unsatisfied CCJs are debts the seller has not paid and that you will inherit if you buy the shares. Multiple CCJs indicate a company in financial distress.

Accounts analysis (are the numbers real?)

Compare the last 3 years of accounts. Look for: declining net assets, increasing creditors, qualified audit opinion, going concern warnings, or sudden switches from full to micro-entity accounts (which hide detail). RecoupIQ's ML models flag accounts manipulation patterns.

HMRC defaulter list

HMRC publishes deliberate tax defaulters. If the company or its directors appear, there may be outstanding tax liabilities that you inherit with the shares. These are often not disclosed in the seller's warranty schedule.

Phoenix pattern check

Has this director previously dissolved a company doing the same trade and then started again? Under Section 216 of the Insolvency Act 1986, this carries personal liability. If you buy from a phoenix director, you may be inheriting a company built on the ashes of failed predecessors.

A person at a desk carefully reviewing a printed document — Anastassia Anufrieva / Unsplash

Share purchase vs asset purchase

Buying shares (higher risk)

You inherit ALL liabilities (disclosed and undisclosed)
You inherit all contracts, leases, and employees
You inherit the tax history
You inherit pending litigation
Due diligence is essential, not optional

Buying assets (lower risk)

You choose which assets to acquire
Liabilities stay with the selling company
Clean start with chosen assets
TUPE still applies to employees
Still check for charges on specific assets

Monitor during the due diligence period

Between making an offer and completing the purchase, the company can change. Directors can resign, new charges can be filed, gazette notices can appear. If you are not monitoring, you will not know until after you have paid.

RecoupIQ monitoring (from £19.99/mo)

Get alerted within 24 hours of any change to the target company: new charges, gazette notices, director changes, status changes, or new filings. Set it up the day you make your offer. Cancel it after completion. Available via the web dashboard or the Microsoft 365 Trust Check app (per-seat for your DD team). RecoupIQ is a Microsoft partner.

See monitoring plans

All 8 checks in one report. £167.

A RecoupIQ Forensic Report covers everything on the checklist above: director network map, charges analysis, gazette notices, HMRC defaults, accounts forensics, and 72 ML risk models across 12 data sources. Delivered in under 90 seconds. Compare that to weeks of manual checking or thousands in solicitor fees.

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Last reviewed: July 2026. General information for UK company acquisitions. Not legal or financial advice. Always seek professional guidance for significant transactions. RecoupIQ Ltd, Company No. 16947526, ICO ZC077511. Microsoft Partner.