Are you in the process of buying a business? There are many aspects that you need to consider including understanding the optimal ownership models and structure to deliver the best operational and tax outcomes. Our Commercial Law team have put together some guidelines to assist you with ongoing success.We encourage you to speak to one of our experts to discuss your needs prior to signing a contract by contact us.
RNG Lawyers business purchase guideline:
DO have your solicitor and other service providers complete a due diligence on the business you propose to acquire.
DO NOT 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.
DO check that all large suppliers are tied to the business and that the vendor is not in breach of their trading terms.
DO NOT accept possession of a leasehold business until a legally enforceable lease is entered into, or a transfer of the current lease is completed. Where applicable mortgagees and/or chargees must consent to such a lease.
DO check that the area covered by the Lease is all of the area used by the business.
DO arrange for all key personnel of the business, who you are retaining, to be contractually tied to the business.
DO NOT agree to pay for the Goodwill of the vendor, without having a signed restraint of trade from the vendor, and it’s office bearers.
DO research the business and be aware of all the risks and stresses involved, not just the financial risks.
DO NOT accept stock which is not of re-saleable quality. Stock should be valued by an independent qualified third party.
DO ensure you have the full support of your family, and that they are aware of the benefits, risks and stresses.
DO NOT rely on verbal agreements and promises - if it is not written it is not done.
DO ensure you have structured your purchase to minimise the risk to your personal assets.