The Legal Obligations when Buying a Business

Businessmen Signing a Document

Commercial lawyers reveal that they often receive implemented Agreements for Purchase of a Business that clients quickly accepted without seeking any legal advice. Moreover, most of them rarely recognise the consequences of the binding contractual responsibilities.

Therefore, you must make it easier for your commercial lawyer here in Townsville to help you out by knowing the do’s and don’ts before signing anything.

For any proposed business, you must evaluate it properly, and it must give you the freedom to check the following aspects:

  1. The list of assets for you to determine the tangible assets you are buying. You have to remember that they will not sell everything on the business premises unless stated otherwise.
  2. Details of the employees in the business, including copies of employment costs and employment agreements.
  3. The financial viability of the business, which you can ascertain from the past three years of GST returns and financial statements. This is the only way to make sure that you are paying for the realistic price.
  4. The unexpired terms of the Lease for the business premises. This is in case you want to request the Vendor to ask the Landlord to permit you to renew it in the future.
  5. Other terms of the Lease because the majority of Leases are in the average form. However, there are those that include more conditions, which can be difficult. In this case, it is essential to note that the Auckland District Law Society Inc. business Sale and Purchase Agreement standard is quite different.

After the date of receipt of Lease documentation or Agreement, the buyer must approve the Lease five working days later.

Before accepting any agreement to buy a business, it is essential that you conduct your due diligence. This way, you will end up with a more satisfying and agreeable contract agreement.