Whether buying or selling a business it is crucial that you obtain advice from a Solicitor before signing a contract. It is also crucial that the parties obtain taxation and accounting advice from their respective accountants before signing a contract.
Preparing a business contract is an involved process. Each contract will be very specific to the circumstances of the parties and the business.
Some of the important areas are as follows:
- The identity of the buyer/seller
- Advice required to how much deposit is payable
- Retention or release of present employees and adjustment of employees holiday pay, sick pay, long service and the like
- Quality and quantity of stock to be purchased/sold.
- Transfer of licences by seller to buyer required to allow business to function.
- Check/provide accounts to determine profitability of business.
- Buyer to obtain approved finance to allow purchase to proceed.
- Lease to be assigned or new lease. Terms of lease satisfactory to buyer?
- What Plant and Equipment are included in the price.
- To what extent will the seller provided initial tuition and assistance to the buyer
- Necessary trade restrictions in place re the seller
- How work in progress to be provided for?
Please note these matters are for guidance only and each contract will have its own particular circumstances.