Nick Dolce, Business Manager
At times, people are presented with the opportunity to purchase an existing business for what they believe is a reasonable price. Tempted by the notion of getting an income-generating businesses, with a solid reputation, a respectable staff, and in a great location, potential buyers miss problems.
There are intangible aspects affecting the acquisition of an existing business. One of the most important is to be sure that your purchase contract contains certain provisions that will protect you if problems arise.
Here are just a few things that you may want to consider:
1) Fully understand what you are buying. Are you buying the assets of a company or are you purchasing all of the stock in a corporation? Each scenario will yield different tax consequences.
2) The owner may be selling you their business, but a sale does not mean the seller is getting out of that line work completely. The seller may be opening a competing business nearby. A non-compete clause and other restrictive covenants in the purchase contract will protect your interests.
3) Does the business own the property in which it operates or does the business have a lease? Property ownership involves different issues, but each, whether a lease or ownership, has distinct advantages and disadvantages.
Although these are just a few ideas that a potential buyer may want to consider, there are other considerations that experienced counsel will know. At Stilp Business Law, P.C., for years we have successfully helped clients resolve their business and real estate issues when purchasing businesses.
image cred: https://srblaw.co.nz/information-overload-what-you-should-focus-when-purchasing-business
