By Tammy Holzheimer – Solicitor-Director, Commercial & Property Law
13 July 2016
Many people dream of buying a business, but don’t always realise how much work goes into turning that dream into a reality. It’s one of the biggest decisions you can make in life – requiring you to invest a lot of time, money and energy into making it a success.
So, not surprisingly, it’s important to start off on the right foot when you take that first step towards becoming a business owner. Understand that each business is different and you should seek legal advice very early on in proceedings which is tailored specifically to your needs and to that of the business.
As a solicitor in the area of commercial and property law with Commins Hendriks, I’ve seen many clients who are embarking on this process. From that experience, I’ve come up with a few basic pointers to consider.
At the top of the list is to look for a good, stable, organised business where everything is in order. Talk with your accountant or financial advisor, and make sure that the business financial records are accurate and that all figures are able to be explained, understood and accounted for.
You should also ensure all legal documents are up-to-date. That includes leases, employment contracts, hire purchase arrangements, client contracts, supply contracts and intellectual property such as patents and Trade Marks etc.
Try to make sure there’re no outstanding issues with any of these agreements.
It’s a good idea to research the business and find out a few things that could help you decide if this is the right investment for you, such as why is the business for sale? Some good places to begin this research are governmental bodies, customers and industry associations.
Other issues to consider include taxation (as GST and Capital Gains Tax are both relevant considerations when purchasing any business), and the value of the business (your financial and legal advisors will need to carry out a process called “due diligence”).
When the time comes to negotiate the agreement, it can be very stressful and sometimes tense.
It pays to have an experienced team of legal and financial advisers to help you. This ensures all relevant factors are taken into account as part of the negotiations and that that you don’t commit yourself to something that’s not suited for your needs.
Our knowledgeable and friendly commercial legal team at Commins Hendriks can provide you with some further tips and information on which aspects of the business to check further prior to making any offer.
For more details and assistance, please contact us on 1800 643 779.