30 May So you want to buy a business?

So you want to buy a business?

When you are buying an existing business, whether you are a first-time business owner or have been in business for years, it is critical that you devote the time and resources necessary to understand what you are buying, a process known as “due diligence.”  This process typically occurs after you made an offer on a business but before you have purchased the business.  During the due diligence process, the prospective buyer needs to request information on the business to evaluate the potential risks and liabilities before committing to the purchase.  The information requested may vary somewhat based on the type of business, but in general the prospective buyer needs to receive financial documents to verify the financial shape of the business, including its profits and losses, assets, debts, contingent liabilities, and ongoing expenses.  Utilizing a financial professional in this area is often a good idea and well worth the expense.  It is also critical to evaluate the business from a legal perspective to understand the potential liabilities involved.  An attorney can assist you with this process, which typically involves reviewing the business structure, corporate records, copies of contracts, licenses, permits, intellectual property rights, pending or threatened litigation, past judgments, any employee or personnel issues, and so on.

There is a lot of information to consider before committing to the purchase of a business, whether you are just buying the assets of the business or the entire business structure.  If you need assistance with this process and would like to schedule a meeting with me, please contact jamie@jmillerlawfirmpllc.com or 918-770-7810.

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