Buying a Business
Buying a business rather than starting one from scratch can make good business sense, provided you remember you are taking on the legacy of the previous owner.
It is essential that you are aware of every aspect of the business before buying it.
The advantages include:
- The business is already up and running
- It may be easier to obtain finance as it has a proven track record
- You will have established customers and contacts
- You may inherit experienced employees
The disadvantages include:
- If the business has been neglected you may need to invest above the purchase price
- You may need a large amount of working capital to assist with the cash flow
- You may need to honour or renegotiate existing contracts
- Current staff may be unhappy with the takeover and leave or have low morale
Having researched the business and when you are happy that you have both the capital and the ability to make a success of the venture, an offer can be made to the seller; if accepted, a period of time is then allowed for you to access the books and records.
This is known as Due Diligence. The purpose of it is to give you a realistic picture of how the business is performing currently and its expectations for the future.
It should also bring to your attention any other issues of concern.
There are traditionally three areas that you should take advice on:
- Commercial Due Diligence – where the business sits in the marketplace, checking competitors etc.
- Financial Due Diligence – checking all the accounts to ensure there are no irregularities.
- Legal Due diligence – as part of the sale and purchase contract, the lawyers can check that the business has a legal title to sell, has ownership of all the assets, and that regulatory and litigation issues are fully addressed.
Thomas Dunton has a team of highly experienced lawyers who will be able to assist you in all aspects of Legal Due Diligence.
Selling a Business
Deciding to sell or close down a business can be a difficult decision to make.
Apart from the physical selling of the property, there are many other factors to take into consideration which the highly experienced Business Team at Thomas Dunton can advise you on.
Your tax and all other accounts and paperwork should be up to date so that the buyer’s solicitor and accountant can carry out their Due Diligence checks.
In addition there will be many other issues to cover depending on the type and nature of your business.
These will include:
- Are you leaving or winding down a partnership?
- Are you selling or closing a limited company?
- What are your responsibilities as an employer?
- Is your business registered for VAT?
- Are you self employed?
Thomas Dunton has a team of specialist lawyers who will be able to assist you in all aspects of the sale of your business.
Contact us at 01689 822554 or email firstname.lastname@example.org