Buying a Business
If you’re looking to buy a business, there are a number of legal issues you need to consider. The process of how to buy a business can be complicated and it’s important to obtain the right advice before and during any negotiations.
We can assist business owners and new owners with:
- ensuring the business structure is set up appropriately for your needs;
- getting all you need in place, to operate the business; and
- protecting you from any debts or other liabilities incurred by the vendor of an established business
Do I need a lawyer to assist in buying the business?
What you want to achieve in buying a business is to make sure that you acquire the whole business that is offered. This is to protect yourself against any liabilities of the business created by the owner and to ensure that you obtain value for the money outlaid.
We can assist you in achieving that goal and ensure that you obtain what you expected in entering the contract to buy the business.
Can my accountant act for me in the purchase of the business?
Strictly speaking, an accountant cannot act on the purchase of a business if it involves entering into and advising on a Contract for Sale of Business.
Only lawyers who are properly qualified are permitted to provide that type of advice.
Should I have an accountant at the time of buying the business?
We strongly advise you to engage an accountant prior to purchasing a business. If you do not currently have an accountant, we can help you find an accountant suitable to your needs.
It is important for your accountant to investigate the financial viability of the business.
Our work is limited to ensuring that the Contract for Sale of Business is effectively entered into and that it delivers good title to the business to you. As lawyers, we are not able to provide financial advice as to whether the business is viable or is as profitable as the vendor of the business may suggest.
What is the best structure to use for the purchase?
This is a difficult question to answer simply. The right business structure depends on:
- the type of business and the industry the business is in;
- who will be the owners of the business;
- who will be involved on a day to day running of the business;
- how long you expect to remain in the business;
- the potential for growth of the business, amalgamation with other businesses, a takeover of other businesses; and
- envisaged exit strategies.
What do I need to give you so you can act on the purchase of the business?
Normally the Contract for Sale of Business is drawn up by the lawyer acting for the owner of the business.
That contract is forwarded to us and we will consider the terms of the contract and provide advice to you on it.
In the meantime, if you have any documents provided by the owner of the business or any business broker, then you should provide these (or a copy of them) to us. This includes any financial material but, as noted above, any financial advice should be provided by your accountant.