What Banks May Ask for After a Business Sale

You have sold shares in a business you started years ago. The buyer’s solicitor sends the proceeds and your bank asks what the money is for and where it came from. You can explain the sale in a sentence, but the settlement figure differs from the headline deal value and the sender is a solicitor rather than the buyer named in the agreement. A concise file showing the parties, the calculation and the payment route can answer questions that a bank statement alone leaves open.

The Financial Conduct Authority describes source of funds as the activity that generated a particular payment and the way the funds were transferred. Source of wealth looks more broadly at how a person or beneficial owner acquired their wealth. If a bank asks about both, answer each on its own terms. The records needed depend on the firm, its checks and the transaction. Ask which information it wants and how to provide it securely.

Tell the bank about the expected receipt

Contact the bank using details you already trust. Give it the expected date, amount, currency, sender and reason for the receipt. If there will be several payments, explain what triggers each one. Check whether the chosen account can receive the amount and currency and ask what information the bank might need before or after the transfer. Advance notice gives you time to assemble records. The bank may still need to review the actual transaction when it arrives.

Confirm who will receive the money. In a personal share sale the seller may be you, while a sale of business assets can result in the company receiving the proceeds. The transaction advisers should confirm the correct recipient account before the instructions are issued. If two people or entities are entitled to different amounts, have them listed separately on the completion statement. A document showing which amount belongs to whom is more useful than a broad statement about the overall deal.

Assemble the record of the sale and receipt

1. Identify the sale and parties. Record the legal names of the buyer and seller, what changed hands and the dates of signing and completion. Ask the solicitor which documents can be shared and whether extracts or a letter confirming the transaction are appropriate.
2. Show your right to the money. Bring the record of your ownership, the share allocation or the company decision governing the payment. If the company made a later distribution to you, keep the company receipt and the distribution record as separate steps.
3. Reconcile the receipt. Use the signed agreement, completion statement and transfer evidence to connect the purchase price with the actual credit. Add currency conversions, fees and deductions when applicable.
4. Describe the payment path. If money goes through a solicitor’s client account, an escrow account or another intermediary, note each step and who holds the supporting evidence. Give the bank a clear reason if a different firm sends the payment.

For example, a buyer agrees to pay £2.4 million in cash at closing. The seller’s entitlement is £1.2 million. Their solicitor pays £1.1 million to the seller and holds £100,000 under the deal terms. A useful note shows the total price, the seller’s share, the retention and the actual payment, along with the dates and documents that support each number. In six months, the same record can explain a release of part of the retention.

Answer a source-of-wealth question separately

When a bank asks how you built the wealth connected to the sale, a dated outline often makes the conversation easier. It can start with when you founded, bought or acquired shares in the company. Add the events that explain material changes in ownership, such as a funding round, share purchase or later transfer. The bank may request evidence such as a share register, historical acquisition document or confirmation from an adviser. Explain gaps in older records and ask what alternatives the bank can accept.

• Sale records. Keep the agreement or approved extracts, the settlement statement and evidence of payments actually received.
• Ownership records. Gather documents showing how you acquired the shares and any changes in your entitlement over time.
• Other relevant records. The bank may ask for a business history, accounts, tax documents or an adviser’s letter depending on the review. Clarify what it needs before sending sensitive information.
• Future receipts. Record earn-out, escrow release and instalment dates. When an amount arrives, attach the notice explaining why it is payable and reconcile it to the original terms.

Use the bank’s secure channel and leave time for review

Ask the bank how to upload documents or send confidential information. Confirm requests through its app, a phone number you already hold or another established channel. A genuine sale often involves people sending payment instructions under deadline pressure. If an email says the receiving account has changed, verify it directly with the solicitor or bank using known contact details. The person checking the change should be able to explain why it was made and who authorised it.

Keep a note of what you supplied, when and who holds the underlying documents. Ask the bank which items remain outstanding and the likely next step. If you need to fund a property deposit, pay a tax bill or move money abroad soon after completion, build in time for checks and any transfer limits. Put those costs on a separate calendar rather than assuming that a credited payment is immediately available for every planned transaction.

If a later transfer goes to a bank in another country, ask the receiving institution what it needs to see. It may want evidence of the original sale and the path from the first account to the new one. Save both transfer confirmations and statements. Keep explanations and dates consistent across the records, and include translations or certified copies when the bank confirms it needs them.

Make a short version of the record for your own use. Give it one line for the sale, one for each deduction or later amount and one for each account through which the funds pass. If there is a change in the final statement, update the line and keep the earlier version with a dated explanation. This helps when the solicitor quotes a closing figure, the bank records a credit in another currency and the accountant works from a different amount. Everyone can see what their own figure refers to.

Keep one record for the life of the deal

A sale can produce payments over several years. Store the original reconciliation with later variations, releases and statements. Give the file a clear title and keep sensitive material somewhere you and authorised advisers can access when required. Make a note of the contact at the firm that completed the sale, since you may need its help long after the buyer has taken over the business.

Before using the proceeds for something with a firm deadline, check how much cash has actually arrived, what remains due and which institution can send the next payment. The sale record should explain each step from ownership to receipt in figures that match the supporting documents. That is the version you can give a bank without rebuilding the transaction from old emails.