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Your Complete Guide in Purchasing a Business: The In's and Out's
Buying a business

Your Complete Guide in Purchasing a Business: The In's and Out's

Purchasing a business can take time, energy and a lot of research! It may seem less risky and more...

The quickest way to expanding market share
Buying a business

The quickest way to expanding market share

There are a handful of tactics companies can employ to increase market share. But first, let’s...

How to Buy an Existing Business: A Comprehensive Guide
Buying a business

How to Buy an Existing Business: A Comprehensive Guide

Many people dream about owning their own business. However, few convert that dream into a reality....

Business Exits: How Earn Outs Work in Detail - Part One
Buying a business

Business Exits: How Earn Outs Work in Detail - Part One

Investment banks and corporate advisors use earn outs as a way of bridging the gap between what you...

The Secret of a business turnaround is not always to “CUT, CUT, CUT”.
Buying a business

The Secret of a business turnaround is not always to “CUT, CUT, CUT”.

I recently attended a conference of like-minded turnaround gurus and found myself in the company of...

How to Navigate Mergers and Acquisitions for Small Businesses
Buying a business

How to Navigate Mergers and Acquisitions for Small Businesses

Acquisitions are not just for large businesses. Small businesses can use them to...

Important Things To Consider When Buying A Small Business in Australia
Buying a business

Important Things To Consider When Buying A Small Business in Australia

When one thinks of buying a business that is already up and running, there are certain points to...

Small Business Brokers: Do I Really Need One?
Buying a business

Small Business Brokers: Do I Really Need One?

Do I really need small business brokers to help me? Let us begin the discussion this way:  Now...

How to Find a Bargain When Buying a Business
Buying a business

How to Find a Bargain When Buying a Business

When buying property they say buy the worst house on the best street. When purchasing a business...

Business Brokers: Who They Are And What Do They Do?
Buying a business

Business Brokers: Who They Are And What Do They Do?

As a business person who wish to buy or sell a business, you might be wondering if it’s really good...

Buying a business

Contract law regulates the purchase of all property, including businesses. In order for a purchase to be legal and effective, the agreement must include an offer, an acceptance of that offer, an intention to create a legal relationship and consideration. Consideration is some sort of benefit to the party, and is generally a financial sum. Purchasing a business should be conducted precisely and in writing to ensure that the terms are fully understood and agreed upon. If you are buying a business you should be sure to involve a lawyer and an accountant so that they can advise you when it comes to making important decisions.

What issues can arise when buying a business?

If you don’t take proper care when buying a business, you risk the sale not being effective or legal and you may leave yourself unprotected. The most important first step is doing your due diligence, which includes carefully examining the books with your accountant to determine the value of the business. Without an accountant you may not recognise the symptoms of a financially unhealthy business.

To ensure that the sale is valid after you purchase a business, you need to ensure there is written evidence of the offer and acceptance and that there is reasonable consideration for the other party (this will generally be the price you have paid for the business). You will also need to consider whether you are buying the business individually or through a company, partnership or trust, and also what tax implications that purchase might have.

How can a lawyer help me when buying a business?

Your lawyer will help you negotiate and draft an agreement with the other party. They will examine any offers or terms put forth by the other party and assess their legality and consequences, offering you valuable advice on how best to approach the negotiation. They will also recommend what to put forth in your own offers and any terms you need to include in the agreement.

A lawyer protects your interests by preventing the other party from taking advantage of you in any way and they also help to ensure the agreement reached is legal and enforceable.

How can an accountant help me when buying a business?

If you are buying a business, an accountant will assist you in your due diligence and assessing the financial position of the business you are looking to purchase. They will also assist you in understanding and meeting any new obligations you may be taking on as the business’ new owner.