Completion accounts (UK) are the closing balance sheet and profit-and-loss mechanics used in British private M&A to finalize consideration after completion.

How it works

UK share purchase agreements often include completion accounts clauses defining effective date accounts, completion accounts preparation window (commonly 30–90 days post-close), and accounting policies (UK GAAP or IFRS as specified). Adjustments typically cover net debt, cash, and working capital against agreed targets or normalised levels. Locked-box deals—fixed price with no post-close accounts except leakage claims—are the common alternative; choice depends on buyer risk appetite and seller preference for certainty. Expert determination by an accounting firm resolves disputes without full litigation. For VC-backed UK startups, shareholders’ agreement and articles may require investor consents before accepting adjustment methodologies. Tax clearance and HMRC notifications may run parallel to accounts preparation.

Why it matters

• Founders: UK exits require disciplined close management—avoid prohibited leakage in locked-box deals or working capital shortfalls in completion accounts deals.
• Investors: LP distributions depend on net proceeds after adjustments; model sensitivity to working capital seasonality in UK B2B businesses.
• Counsel: SPA drafting on definitions of debt, cash, and working capital drives fight risk; align management accounts with completion definitions early.

Common mistake

Using management reporting definitions that differ from SPA-defined working capital—creates surprises when completion accountants apply contract-specific line items.

Related ideas

Locked-box, leakage, working capital target, share purchase agreement, and expert determination are UK M&A terms paired with completion accounts.