You may have been considering purchasing a business and now are ready to make the move. There are benefits in buying an existing business, such as having an existing customer base, familiar brand, established vendor networks, team of employees, business licenses, and assets. Purchasing an established business, however, does come with other risk factors that you need to be aware of. Here are a few things to consider that can save you from complications, liability, and added costs.
- Identify which party will deal with accounts receivables
- Verify if you can assume the seller’s lease
- Be aware of prepaid expenses incurred by the business
- Obtain an indemnity from the seller
- Negotiate a “letter of intent”
- Review the company’s current contracts
- Be aware of the zoning or industry regulations that affect the business
- Understand if the company is involved in any ongoing lawsuits or have been involved in one in the past
With all these factors to consider before purchasing a business, it is important to do your due diligence and consult a lawyer. Getting a lawyer involved in the sales process early on will ensure you are getting a fair deal and make certain that you are not at risk for any legal issues down the road. At Portalatin Law Firm, we can assist in negotiating the purchase on your behalf to help minimize liability issues. We can also draft or review all contracts involving the purchase, customers, suppliers, and employees. Call our office today if you or someone you know is considering purchasing a business.
