What happens to energy when a business changes hands?
If the company's shares are sold, the company stays the customer and the contract carries on. If the business and premises or lease change hands, the buyer becomes the new occupier and the supplier processes a change of tenancy, usually within 10 working days of seeing proof.
It depends on what is sold. If you sell the company's shares, the company stays the customer and nothing changes with the energy. If you sell the business and premises or just the lease, the energy account usually goes through a change of tenancy.
Share sale or asset sale?
| Type of sale | Who is the energy customer? | What to do |
|---|---|---|
| Shares in the company sold | The same company | Update contact details and the person who authorises changes. The contract carries on. |
| Business and premises sold or lease assigned | The new owner takes the site | Change of occupier with the supplier. |
| Business sold but you keep the premises | You remain occupier | Consider whether you or the buyer needs the supply. |
Check which sale applies with your solicitor, because the energy rules follow the facts.
What the change of occupier involves
Ofgem says to tell the site's supplier as early as possible. A new owner supplies evidence such as sale papers or title deeds, and the supplier has 10 working days to review. It then closes the old account and opens a new one, rejects the change with reasons, or asks for more evidence. Our guide to closing a business energy account covers the leaver side.
Sale-day checklist
- Agree the completion date and tell the supplier.
- Take dated photographs of every meter at completion.
- Send the readings to the supplier and the buyer.
- Agree who pays the final bill and any credit balance in the sale contract.
- Cancel direct debits only after the account is formally closed.
A worked example
You sell a bakery with completion on 31 January. Final electricity reading: 41,200 kWh. The last bill ended at 40,000 kWh. At an illustrative 27p/kWh you owe 1,200 × £0.27 = £324 plus standing charges. If the buyer's reading is the same, there is no dispute. If no reading is given, the supplier may estimate, and you could pay for the buyer's usage. See how to correct an estimated bill.
Contracts and credit
- Do not assume a fixed contract in your name passes to the buyer. Ask the supplier whether it will transfer the contract; otherwise the buyer signs a new one, and your contract terms decide whether any exit charge applies.
- Any credit balance belongs to the account holder unless the sale says otherwise. Learn more in getting a credit refund.
- A buyer with no contract may start on a deemed rate, as explained in the deemed contracts guide.
Staff, suppliers and bills after the sale
Do not forget the paperwork around the sale itself. Hand over copies of recent bills, the supply numbers and the supplier's contact details. If you used a broker, tell them the sale is happening, because any agreement they hold is with you or your company and the buyer may want their own advice. Ask the supplier to confirm in writing the date the old account closed and the final balance, and keep that email for at least a year in case a late bill appears. Where you have more than one site, deal with each meter point separately, since each has its own readings and may close on a different date.
Next steps
Ask your solicitor to add energy to the completion checklist, and give the buyer the supply numbers and meter locations in writing.
Sources
General information only. Energy prices, rules and supplier terms change; check the latest position with your supplier, Ofgem or the Energy Ombudsman before you act.