Business purchaser legal services
Buying a business can be a risky endeavour and it is vital you perform due diligence before making any big decision. Understanding what steps must be taken to ensure the legal and financial health of a business before purchasing it is crucial. Getting independent financial advice from an accountant or business adviser on the company's finances and financial status, and independent legal advice on the contract of sale is good first step to take.
Each business transaction is unique and there is no "one size fits all" approach to purchasing a business. Some key considerations that should be taken into account by a purchaser include:  
There are extra procedures and paperwork to consider if the business you want to acquire is a franchise. This includes things like reading through the franchise agreement and giving serious thought to the commitments you are making. Franchise agreements are often strongly structured in favour of the franchisor.
You should sign the contract only after you've done your due diligence and are confident in your understanding of the business's value and the scope of the protections the contract contains.  A full or partial deposit, as specified in the contract, is generally paid at the time of signing, and a receipt for this amount must be received as confirmation of this transaction.
Purchasing an established business is an exciting but difficult adventure. At Pera Lawyers, we urge our clients to seek the counsel of a competent accountant and lawyer before making any major decisions or signing any contracts.
Generally, the following steps will take place in the buying of a business:
  1. Finding the right business
  2. Negotiations
  3. Contract finalisation and execution
  4. Completion/Settlement 


Pera Lawyers are here to help you every step of the way.

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KEY CONSIDERATIONS WHEN
PURCHASING A BUSINESS

1. Is there a lease to be transferred and how long are the remaining terms?

A purchaser should carefully consider the obligations of the lease that is being transferred as some leases can have onerous provisions. It is important that a purchaser is aware of these before signing.

2. Will there be a restraint of trade applied to the vendor post settlement?

To protect their business investment, most purchasers will require the vendor to sign a restraint of trade clause that prevents the vendor from opening a rival business nearby.

3. Will any employees be transferred and how will their entitlements be apportioned?

A diligent purchaser should have the contract of employment of each employee reviewed prior to transfer. They should also see if the employee is a good match for their organisation.

4. What is the nature of the tangible assets, such as plant and equipment and intangible assets, such as intellectual property and websites, that will be transferred on completion?

A clear list of assets being transferred at the outset in the contract of sale can prevent any disagreements from arising at settlement.

5. Does the operations of the business conform with regulatory requirements of relevant authorities such as the local council?

A purchaser should always do their own checks and research into the business they are enquiring and not rely on the representations made by the vendor or their business broker.

6. What will be the entity under which you will purchase the business and have you given legal risk and taxation consideration to this issue?

Getting legal and financial advice at the outset of the transaction can help establish your business structures in the most advantageous way.

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