Top 10 Tips for Buying a Business

Posted by Malcolm Campbell on 22 February 2017
Top 10 Tips for Buying a Business

 

 

 

 

 

  1. Conduct thorough due diligence;

  2. Make sure that the method used the valuing the business is accurate Think about how you will deal with stock;

  3. Allow for adjustments to the purchase price in the event that anything occurs or arises that may affect the profits or value of the business, for example, employee entitlements;

  4. Carefully consider apportionment of the purchase price for stamp duty purposes in terms of both the dutiable property the subject of the transaction, and its location;

  5. Obtain comprehensive representations and warranties by the vendor as to the state of the business and adequate restraints form the vendor;

  6. Review the deadlines for payment of stamp duty in each relevant location to avoid incurring late fees and determine whether the business will be sold as a going concern and whether you will be liable for GST on the purchase price;

  7. Consider whether conditions precedent should be included in the contract;

  8. Identify any key personnel and whether such personnel are to be offered new positions of employment and/or whether they are the subject of an adequate restraint of trade;

  9. Identify the intellectual property to be purchased and the relevant owner. Obtain warranties and indemnities in relation to the vendor's right, title and interest to such intellectual property;

  10. Ensure that any premises necessary to conduct the business will be assigned or transferred to you at completion.

To read more about buying a business read our Blog Series on Buying & Selling Businesses:

Part 1 - Overview

Part 2 - Structure of the Transaction

Part 3 - Pre-Contractual Negotiations

Part 4 - Key Issues to Consider

Part 5A - What Can Go Wrong After Completion

Part 5B - What Can Go Wrong After Completion

Part 5C - What Can Go Wrong After Completion

Part 6 - Managing the Risks

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