Buying a business is a serious investment and is not without risk. If you are thinking about buying an existing business, it is important to conduct your research and do your due diligence before you sign any documents.
Established businesses often come with advantages such as an existing customer base, goodwill and immediate cash flow. However, not every business is a good prospect. For example, business owners may be trying to sell an under-performing or unprofitable business. With the potential to inherit problems of a business, it is important to seek professional legal advice from the beginning. Clearly understanding what you are investing in and the risks associated with the purchase is paramount to help you avoid unexpected pitfalls.
There are many considerations you should take into account when purchasing a business. These include:
- the purchase agreement;
- non-compete clause to block the vendor from establishing a new competing business;
- the purchase price;
- the payment terms;
- the costs to run the business;
- is the business profitable?;
- the business structure;
- the employees;
- any past or current disputes relating to the business;
- if there is a lease;
- licences and registrations;
- legal regulations and compliance requirements; and
- the industry and competitors.
Investigating a business and determining if it is a feasible investment can be complex and time-consuming.
At PCL Lawyers, our team of commercial lawyers can assist at any stage of the buying process. We take the time to understand your expectations, your commercial needs and business goals. Our business lawyers carefully review all relevant documents and can assist by negotiating with the seller to reach an agreement to ensure your interests are protected in the transaction.
If there are lease premises, our team of property lawyers will ensure that the new or assigned lease is handled for you.
If you are considering or in the process of buying a business, contact us on 1300 907 335 or complete the enquiry form on this page.