Expanding your venture by buying an established business holds the potential for huge profits. Before you make any move, however, you should hire a lawyer with considerable experience in corporate law.
When purchasing a business, the whole deal will revolve around the sale agreement. A corporate lawyer will help you ensure that everything is legally correct, above board, and most of all, protects your best interests. A good attorney will be able to spot the signs of trouble and prevent you from getting trapped inside a bad deal.
BUYING A BUSINESS: POTENTIAL ISSUES
- Hidden Debt
If the business you’re interested in is buried in debt and you buy it without knowing, you will assume responsibility in paying for all of that debt. Instead of the profits you were expecting, your new business can quickly put you in the red and cripple your finances.Your attorney can go through the documents carefully and evaluate the financial health of the business you want to buy. They can also add a clause that says the sale is only legal if there are no hidden or outstanding debts.
- Lease Issues
The lease is an essential part of buying a business if you’re not planning on relocating. The current lease needs to be studied by an attorney to find out if it will remain favourable to your plans.If not, they can add some special clauses to the lease that will allow you to trade and do business in the way that works for you.
- Stock and Assets
Corporate lawyers in London will advise you to consider all the stocks and assets that you will receive after buying the business. These are necessary so you can keep trading.Is everything you saw during the inspection included in the sale document? If an asset or stock is missing, it won’t be there once you’re ready to open for business. Chances are, the previous owner already sold it without telling you, all for their own profit.With a business lawyer, you won’t be caught off guard when you find out too late that you’re not getting everything you were promised in the sale.
- Financial Terms
There are a lot of ways that you can get scammed in the process of buying a business. One of these is being stuck with financial terms that you are unable to fulfil.The financial terms of a sale is usually defined in a business sale document. You need an experienced attorney to go through the papers and determine if you can pay according to the terms.If not, you can ask your attorney to draft a clause that will modify those terms so you will be able to afford the payments. Without this, your business can fail before you can even get started.
Having good legal advice at every step of the buying process will make a great deal of difference in your ability to run your new business, pay for it, and secure profits. The best person to handle all of these is a lawyer who’s experienced in business law and understands what to do.