Buying a Business
- have your lawyer and other service providers complete a due diligence on the business you propose to acquire.
- check that all large suppliers are tied to the business and that the vendor isn’t in breach of his trading terms
- arrange for all key personnel of the business, whom you are retaining, to be contractually tied to the business.
- research the business and be aware of all the risks and stresses involved, not just the financial risks.
- ensure you have full family support, and that they are aware of the benefits, risks & stresses.
- ensure you have structured your purchase to minimise the risk to your personal assets
- rely on or accept the vendors comments regarding cash takings of the business which are claimed to be over and above those recorded in the business’ financial statements.
- accept possession of a leasehold business until a legally enforceable lease is entered into, or that the transfer of the current lease is completed. Where applicable mortgagees and/or chargees must consent to such a lease
- agree to pay for the Goodwill of the vendor, without having a signed restraint of trade from the vendor, and it’s office bearers.
- accept stock which is not of saleable quality. Stock should be valued by an independent qualified third party.
- rely on verbal agreements & promises, if it’s not written it’s not done.
You should not act only on the basis of material contained in these law tips because the contents are of a general nature only and may be liable to misinterpretation in particular circumstances. Do not act on any of the contents of this leaflet without first obtaining specific advice from your own solicitor or Eales & Mackenzie.