What Should I Think About Before Buying A Business?
From a legal point of view there are a lot of things to consider when you’re buying a new business. For starters, you need to make sure that the contract of sale is in order and that you’re getting everything that you’re expecting to get.
Similarly, you need to make sure that everything is as it appears on the surface so that you don’t run into problems when you take over the business. Experienced commercial lawyers will be able to help you with everything you need to know when you’re buying your first business and I’d definitely recommend speaking to one.
With this in mind, I’ve put together a short list of the legal considerations you should keep in mind before you buy any new business:
Make Sure Any Building Contracts Are Transferable
If you’re buying a physical business which runs from a specific location, you need to make sure that the premises are included in the sale. Speak with the vendor about this, inspect the sales documents, and consult your commercial lawyer to make sure that everything is above board.
On the other hand, if the premises are leased then you need to speak with the owner to make sure that they’re happy to transfer the lease into your name. Usually they will be, but it’s important to double check.
Make Sure That You Understand The Contract Of Sale
It’s equally important to work through the contract of sale carefully to make sure that it’s not going to throw up and nasty surprises once you’ve signed it. Make sure that everything you’re expecting to be included in the sale is included, and make sure that you’re actually going to be paying the price that you’re expecting to pay.
Similarly, it’s also very important to make sure that the hand-over date is specified, otherwise you might not gain control of your new business as soon as you want to. This can lead to lost revenue and decreased income.
Make Sure That All Financial Figures Are Transparent
You need to make sure that you go over the finances of the business that you’re buying with a fine tooth comb. Make sure that things like sales figures, revenue, and overall profit match up, and make sure that the books haven’t been altered at all.
At the same time, you need to consider the business tax history. Make sure that they’ve paid the right amount of taxes and that they’re up to date with their payments so that you don’t have to worry about things in the future.
Final Word
Buying a new business is something of a complicated process, but you can streamline it by making sure that you’re careful and that you take all important factors into consideration.
For starters, you need to make sure that you have a clear contract of sale that outlines everything it needs to. Comb through the business’s finances to make sure that they’re in order, and make sure that you consider property agreements before signing any purchase documents.
Above all, make sure that you speak with a commercial lawyer before you buy any new business to make sure that you’re doing things right.
