Care buying & selling a business
Care with business acquisitions
Buying and selling businesses has always been a part of the business world that requires caution. In recent years however buying and selling occurs more often and there has generally been an increase in the number of small businesses with emerging coffee shops, cafes and food trucks. Further people are looking to set up their own business or acquire someone else’s “start-up” rather than continue in an employed career. All this is fine except many people fail to appreciate what can go wrong if they do not check out the business they intend to purchase carefully. In this office we regularly see people who have acquired their own business without seeking legal advice and then find problems with the business. Remember when you are spending significant amounts of hard-earned cash (or borrowed cash) to acquire a business, it is very important to ensure everything is in order. Your business structure is important for tax reasons and your accountant needs to ensure that the books of account of the business are valid. Talk to your accountant about these issues. Leases need to be checked and sometimes franchise agreements need consideration. It is important to check that no lender to the person selling the business has put a charge over the assets. Issues concerning stock, staff and the transfer of intellectual property are crucial to ensure you get off to your best start with your new business. There are many hidden traps and it is important to get professional advice. Although the world is changing the ancient saying of “caveat emptor” (buyer beware) is still very applicable in today’s day and age.