Hi! Buying a Business...

[achillies25]

Hello,

I have been talking to a business owner for sometime about the sale of her business to other parties - and - over the weekend, I have decided that I'd like to buy her business.

We have discussed it, are both happy with a price and I have sent her a "I'd like to buy it for X" email - what are your suggestions for what we should do?

We want to keep costs to minimum, I have a good grasp of the business and what makes it tick, so, really, I'm just looking for pointers on things I should sort from a legal standpoint?

Thanks,

[R0b]

Hello, there is far too much to consider to even think about posting it on here - it would go on to several pages.

A few crucial (but not exhaustive) points to consider is:

1. What type of business are you purchasing, if it is a limited company then are you purchasing the assets or the shares?
2. Due diligence is fundamental in buying a business regardless and you should not skimp on this or it might come back to bite you.
3. Are there any employees involved and if so, does TUPE apply?
4. Tax implications?
5. Intellectual property? Are you agreeing to purchase the IP rights to the business e.g. the logo, name of the business, domain names, trademarks etc. What about any software used by the business, do they own the rights to that too and if not, you will likely need to obtain consent to continue using those licences and ideally you need to get the seller to obtain those consents to use the software.
6. Disclosure letter - this is integral to any merger or acquisition. It lists everything including the above information, employee information or any litigation disputes, debts and any warranties or representations that certain facts are true. Depending on whether the facts given are a warranty or a representation will then determine the type of remedy available to you.

The list goes on and on but the short story is that you would be very wise to get a lawyer on board. Otherwise, take the risk but don't complain if you made a bad business deal, you have legal proceedings against you, or some other negative impact.

[davenewbergr]

You haven't told us about your relationship to this person but it is a slight concern that you seem to have been advising her on a sale and now have offered to buy. You should make sure that there is no whiff of undue influence involved. I second ROB's advice to consult a specialist lawyer. A good proportion of a profitable litigation cases have resulted from people who thought they would enter into business arrangements without paying a £1000 for a lawyer to advise them - and ended up spending £40,000 8 years down the line when things go pear-shaped.