There are quite a few legal issues when buying a business.
Lots of people make enquiries from us wanting to buy their first business.
A lot of these things are preliminary and basic common sense things that professionals such as your lawyer, your accountant and your bank manager should be able to guide you through.
Your business broker early on will generally provide you with a Heads of Agreement document that will outline the main issues that define the sale of the business and what terms you have agreed.
It is a good idea to send a copy of this to us so we can advise you before you sign it.
Once done the contract will be drawn up by the vendor’s lawyer.
The contract is not a take it or leave it document but should be treated as a working draft of ultimately will be the deal between the vendor and the purchaser (you).
It doesn’t mean that you can renegotiate every part of the deal again, otherwise the Vendor will say quite rightly that you are not conducting the matter in good faith.
Instead the contract contains the nuts and bolts of how the matter will progress that will be defined in detail.
Legal Issues When Buying A Business
So things like the following issues do matter in any contract;
- The completion date (settlement or handover money and get the keys date)
- A full list of communication mechanisms that form part of the sale
- Restraint time and distance are important aspects that impact on you and the Vendor.
- Any training period is also an important issue
- The lease
- Any third party agreements.
- How to deal with employees.
By now, you have worked out that you need the help of good commercial lawyers (like us) to advise you.
Here is an article called 10 Legal Issues To Consider When Starting a New Business you may also find useful.
Call us to discuss your business purchase or business sale matter.