You’ve built something valuable. Now you’re selling it. Getting paid should be the straightforward part – but for most founders, the mechanics of actually distributing sale proceeds to shareholders is something they’ve never had to think about before. Here’s what to expect:
1. The money doesn’t just land in everyone’s bank account automatically
Completing a deal and distributing the proceeds are two separate things. Once completion funds are received, someone has to verify every shareholder, validate every bank account, calculate each entitlement, convert currencies where needed, and execute the payments. That process needs to be managed carefully, and it takes time.
2. A paying agent takes that job off your lawyers
A paying agent is typically a regulated or authorised third party appointed to manage the distribution of sale proceeds on behalf of the seller. They handle the mechanics of getting money to every shareholder, so your legal team can focus on the deal itself. On transactions we handle at Shieldpay, distributions involve an average of 48 shareholders – some run to over 900.
3. Every shareholder has to be verified
Before any money moves, the paying agent will need to verify every recipient via identity and AML checks. That’s not optional – it’s a legal requirement. The larger your shareholder base, the more significant this step becomes. A digital paying agent can run this verification at scale and in parallel, rather than one by one.
4. Bank account fraud is a real risk at completion
Fraud attempts targeting high-value transactions are common, and completion is a vulnerable moment. Confirmation of Payee checks (or equivalent payment verification tools in certain jurisdictions) – which verify that a bank account actually belongs to the person you think it does – are essential. Without them, you’re exposed to authorised push payment fraud, where funds are sent to a fraudulent account and recovery is difficult.
5. You may have shareholders in multiple countries
Even businesses that feel entirely domestic often have shareholders, option holders, or investors based overseas. Distributing to multiple jurisdictions means navigating different currencies, payment rails, and compliance requirements. It’s worth establishing early on how many countries are involved and whether your paying agent can handle them. We’ve processed distributions across 29 countries on a single deal.
6. Completion isn’t always a single payment
Many deals include holdbacks, earnouts, or deferred consideration – amounts that are held back and paid later depending on performance or post-completion adjustments. A paying agent manages these staged distributions, not just the day-one payment.
7. Funds are held in regulated, ring-fenced accounts
Any paying agent worth using holds completion funds in safeguarded accounts, separate from their own money and protected under FCA regulation. This matters: if the paying agent were to fail, the funds are protected and ring-fenced for distribution to shareholders. Check that your paying agent is FCA-authorised before you appoint them.
8. Speed matters – but accuracy matters more
Shareholders want to be paid quickly. That’s understandable. But errors in a mass distribution – whether a wrong amount, a failed verification, or a payment to the wrong account – are costly and sometimes irreversible. The right paying agent gets both right. The transactions we handle range from a few million pounds to over £1.9 billion.
9. Your lawyers should be appointing the paying agent – not discovering them on completion day
The paying agent should be in place well before completion. Ideally they’re involved at the point the deal structure is agreed, so the distribution mechanics can be built into the timetable. Last-minute appointments add pressure and increase the risk of errors.
10. This is not a back-office task
Distributing sale proceeds to shareholders often involves regulated financial activity. It touches fraud prevention, AML compliance, cross-border payments, and the handling of sensitive personal and banking data. The firms that handle it best treat it as a core part of the deal, not an afterthought. The shareholders waiting to be paid will notice the difference.
Rich Hathaway is General Counsel at Shieldpay, an FCA-regulated payment platform that manages shareholder distributions, escrow, and third-party managed accounts for law firms and corporate advisors. Shieldpay has processed over £9 billion across paying agent and escrow transactions.
Find out more at shieldpay.com/paying-agent.
If you’d like further advice navigating the logistics of your business, reach out to Martin Donoghue, Partner in our Corporate and Commercial team on +44 (0) 20 7851 0126 / md@branchaustinmccormick.com.