What happens to your team when you sell your store?

Short answer. In a share sale, employees usually stay employed by the same company, with the same contracts. In an asset sale, the rules depend on the country: in the UK and the EU, employees generally transfer to the buyer with their terms protected, while in the US the buyer usually chooses whom to hire. Freelancers and agencies depend on their contracts. Plan who you tell, when, and how you keep key people through the sale.

Key takeaways

• The structure of the deal decides most of what happens to employees.
• In a share sale, the employer stays the same company. Contracts continue.
• In an asset sale, UK and EU rules generally move employees to the buyer with their terms. US rules usually don't.
• Freelancers, agencies and creators follow their contracts, not employment law.
• A team that stays reduces owner dependence, and buyers pay for that.

Why does the team matter to a buyer?

Because your people are part of what makes your business transferable. A customer service lead who knows every recurring problem, a freelancer who produces the creatives that work, an operations person who talks to the supplier every week: they're what lets the store keep running when you step back.

For a buyer, a team that stays is the opposite of owner dependence. A team that leaves halfway through the sale is a risk they'll price in.

What happens to employees in a share sale?

In a share sale, the buyer acquires the company. The company remains the employer. Employment contracts, salaries, holiday entitlements and length of service usually continue as they were. Only the owner of the company changes.

That doesn't mean nothing changes in practice. The buyer may reorganise later, under the normal rules of your country. But the sale itself doesn't end anyone's employment, and you won't need to sign anyone off.

What happens to employees in an asset sale?

In an asset sale, the business moves from your company to the buyer's. Whether employees move with it depends on where they work.

United Kingdom

The TUPE regulations protect employees when a business, or part of it, moves from one employer to another. Their jobs usually transfer to the new owner, with their terms and conditions, and continuity of employment is kept (GOV.UK, Business transfers, takeovers and TUPE). There are also obligations to inform and, in some cases, consult employees before the transfer.

European Union

EU countries apply similar protections, based on Council Directive 2001/23/EC on safeguarding employees' rights in transfers of undertakings (EUR-Lex). Each country implements it in its own law. In Italy, for example, the rule is in article 2112 of the Civil Code. Details, like information and consultation duties, vary by country.

United States

There's no general rule that moves employees with the assets. In an asset sale, the seller's company usually ends the employment relationship, and the buyer decides whom to offer jobs to, on its own terms. State laws govern final pay and notices, and larger businesses may face federal notice rules. Your lawyer should check what applies to you.

Elsewhere

Rules differ. If your team works from another country, ask a local employment lawyer before you agree the structure. It's a short call that can save you a hard one later. Our guide to asset sale vs share sale covers the other differences between the two.

What about freelancers, agencies and creators?

Most small eCommerce teams are a mix: one or two employees and several freelancers, an agency, some creators. Contractors aren't covered by employment transfer rules in the same way. Their position depends on their contracts:

• Share sale: contracts with the company usually continue, unless they include a clause that lets the contractor end them on a change of owner.
• Asset sale: the buyer chooses which contracts to take over. Some need the contractor's consent to be transferred; others are simply replaced by new agreements.

Before the sale, check who owns the work they produce. Creatives, photos, copy and designs made by freelancers should belong to the business. If contracts don't say so, fix it, because buyers will ask in due diligence.

When should I tell the team?

Confidentiality first. A sale that leaks early can push good people to look for other jobs, right when you need them. Most founders keep the circle small until the deal is close.

A practical sequence:

1. At the start: nobody on the team, except a partner if you have one.
2. During due diligence: key people the buyer needs to meet, under confidentiality, with a clear message.
3. Around signing: the rest of the team, with the buyer, with a plan for the first weeks.
4. Where the law requires it: information or consultation steps at the time the rules set.

Our guide to selling confidentially covers how to run calls and visits without the team noticing.

What do I tell them?

Your team will want to know three things: is my job safe, will my pay change, and who will I work for. You won't have every answer. Give them the ones you have, honestly:

• what's happening, and why;
• what it means for them, as far as you know;
• what hasn't been decided yet, and when it will be;
• who they can ask questions to.

Don't promise what you can't control. If the buyer hasn't committed to keeping everyone, say so. A promise broken a month after closing does more damage than an honest "I don't know yet".

How do I keep key people through the sale?

Make them part of the plan

Key people who learn about the sale late, and by accident, are the most likely to leave. Key people told at the right moment, with a role in the transition, are more likely to stay.

Consider a retention bonus

Some founders offer key people a bonus paid at closing, or after an agreed period with the new owner. It's a common way to share part of the outcome with the people who helped build it. Agree with the buyer who pays it.

Introduce them to the buyer

A good buyer will want to meet the people who run the business. A conversation before signing can reassure both sides.

Put their role in writing

If the buyer intends to keep someone in a specific role, ask for it to be reflected in the agreements, or in an offer letter at closing.

What will the buyer ask about the team in due diligence?

Expect a request for a simple people file. Having it ready saves time and shows the business is organised:

Two common gaps to fix before the sale: freelancers paid from a personal account, and work produced without a written agreement on who owns it. Both are easy to sort out early and awkward to explain late.

What does this mean for my price?

A stable team that stays through the sale makes the business easier to take over. That shows up in a smaller discount for owner dependence, a shorter handover and fewer conditions in the agreement. A team that's unsettled, or a business where nobody but you knows how things work, pushes the other way.

After the sale

Your relationship with the team changes. During the handover you'll be introducing the new owner, explaining how things work and stepping back. We cover that period, and the non-compete and non-solicit clauses that usually come with it, in life after selling your business.

If you want to know how a buyer would read your team and your business, request a free valuation. Answer in 24 hours, zero upfront costs, no commitment to sell.