Posted on 29 June 2023
Purchasing an Existing Business: key insights for success
Purchasing an existing business means that most of the hard work has already been done for you. There is an existing customer base, established procedures, experienced staff and immediate cash flow. However, not everything is always as it seems with business transactions. It is important to consult lawyers for business affairs throughout the purchasing process to ensure the key terms of the contract reflect your interests and there are no nasty surprises waiting for you in the contract or in the business once it becomes yours.
What is involved?
Prior to the completion of a sale of business contract, a potential buyer should always conduct due diligence on the business. This extends to checking business records, pre-existing lease agreements, financial statements, intellectual property, and the assets of the business.
If there is a registered security against an asset of the business, our business solicitors step in to make sure it is discharged prior to purchasing the business or you may end up buying assets which are securing someone else’s debts!
By the same token, there may be terms in the current lease which may prohibit the type of business you wish to operate or hinder future growth of the business.
How do I make sure the business purchase contract terms suit me?
The seller’s solicitors will generally be the ones to draft a sale of business contract.
Key terms of the business purchase contract will include: the purchase price, the assets and equipment to be included within the purchase, the proposed date of settlement and other key terms such as assignment of the lease for the business and more.
It’s important to have this contract reviewed by a business lawyer so you understand your rights and obligations throughout the purchase process.
It’s also important your business lawyer makes sure there is sufficient opportunity to conduct the necessary due diligence into the business and requests the necessary special conditions.
What can Omnia Legal's Business Lawyers on the Sunshine Coast do for me?
The business solicitors at Omnia Legal are experienced in business transaction matters and providing large and small business legal advice. Our Sunshine Coast business lawyers can make sure your rights as a party to the contract are protected.
We review and amend the terms of existing contract or draft new contracts to make sure our client’s business transactions runs smoothly.
If you have any questions about buying an established business please do not hesitate to contact our business solicitors for your free consultation.
This article provides general information on legal topics for educational purposes only, and should not be considered legal advice or recommendations. While we have taken care to ensure accuracy, Omnia Legal is not responsible for any errors, and makes no guarantees about the accuracy or completeness of the information. Links to third-party websites do not constitute an endorsement, and we are not liable for any damages that may result from using inaccurate or incomplete information. It's always best to seek legal advice for specific situations.