Things to consider when buying a business
Taking over an existing business can be a daunting prospect. There are a whole raft of matters to consider and it would most likely be one of the most complex purchases someone can make. From fixtures to the property, different fragments which make up the business will usually need to be transferred to you as a new owner. There is usually a considerable amount of financial and legal due diligence required before you would be in a position to complete a business purchase. Things to consider in the early stages include:-
- Do you have the skills to take over the business and continue serving its customers?
- Has the business been valued at a fair price?
- Are there any existing liabilities which you need to be aware of?
- Do you have the finances in place to fund the purchase as well as the purchase of any trading stock or fixtures and fittings?
- Will external finance be required from a bank or a third party investor?
- Does the property need a survey and are you inheriting any liability under a lease?
It is imperative to obtain sound financial advice from a financial advisor or an accountant when carrying out any financial due diligence as you will always want to ensure the accounts and the finances are in place and as expected before committing to a purchase.
Once you have overcome this and decided you the venture is right for you then it is essential to instruct a solicitor who specialises in business purchases to carry out the legal due diligence. A solicitor will review all of the contract documentation, raise enquiries and ensure the correct documentation is in place to protect you as a buyer. If existing staff is being transferred as part of the business transfer the solicitor will need to ensure the transfer adheres to all the relevant employment laws which govern such transfers. If the transfer is not carried out properly you could as a new business owner you could find yourself dealing with all sorts of liabilities even before you have started trading.
At Willsons Solictors we provide specialist legal advice for clients who are looking to buy or sell a business. With our wealth of experience our experienced and expert commercial team will guide you through each and every stage. For more information, contact our professional and friendly team on 024 7638 7821 or akang@willsonslegal.co.uk.
