No matter whether you are buying or selling a business, the sale agreement is the document that the whole deal will pivot on. It is essential to have your lawyer draw it up if you are selling, and if you are the business buyer you will certainly need to have the document assessed by a an experienced business consultant or solicitor to ensure everything is above board and legally correct.
There are many ways you can be scammed when purchasing a business, but a lawyer will be able to pick up on anything that is not right or even a bit suspicious and check into it. Here are some of the problems lawyers can catch.
- Hidden debt. Sometimes a business owes people lots of money and when you are buying it, you can become responsible for all the debt. This can become a crippling obstacle standing in the way of those profits you expected. A lawyer can go through the document and add a clause that makes the sale legal only if there are no outstanding debts.
- If you are purchasing a business, the lease is an important part of it, unless you are planning to re-establish in another location. A lawyer can look at the lease and tell you whether it is favourable or needs some clauses added to it so you can continue to trade in the way you planned.
- The sale agreement should detail all the stock and assets of the business that will be included in the sale. You’ll need these in order to keep trading and so it’s important that everything you saw when inspecting the business is included in the document. If something is not included, don’t expect to find it there when you open for business. The previous owner will have sold it off for extra money.
- A business sale document will usually contain the financial terms of the sale. It is important that a lawyer go through these to make sure you can pay. If it will be difficult to meet the payments it is essential to draft a clause to change those terms and make it easier, otherwise your business could founder before it gets going.
There are many other things a solicitor can help you with when buying or selling a business. Having good legal advice on all the aspects can make a great deal of difference to how the business progresses and your ability to run it and pay for it. Legal advice should be sought on a frequent basis, especially if you’ve never owned or operated a business before. You’ll need to have new contracts drawn up with all the suppliers for your business and many clients too. A lawyer is the best person to handle all those things.