Business Acquisition Guide
• Do your research and approach only reputable business transfer agents
• You may be asked to sign a Confidentiality Agreement. We recommend that you take legal advice before doing so
• You will need to view the target business and this is a great opportunity to gain as much background information and understanding about the business as possible. You would need to consider the following: How the business is performing (sales, turnover and profits)? The financial health of the business is crucial to your decision making Why the business is being sold? Who are the competitors? Past activities and track record? And many more questions will need to asked and addressed.
The Next Step
• Confirm to the Agent that you have or can raise sufficient funds to complete the purchase
• Make an offer (subject to contract) through the agent
• If the offer is accepted it is now time to instruct a solicitor – we recommend you choose one who is experienced and specialised in business transfers.
• Request copies of the business accounts and discuss these with your accountants.
• Perform any other due-diligence you think is necessary. For example instructing a Surveyor to survey the building on your behalf
▪ The Agent will of normally draw up the heads of terms and circulate this to the parties solicitors.
The Role of Your Solicitor
It is important to engage your solicitor at an early stage and one who is extensively experienced in dealing with business transfers.
• Legal Due-Diligence This is a period of time during which your solicitor will verify whether what you have been told by the vendor is true. i.e. confirm the legal ownership of all assets, any contractual obligations and check for any current or pending law suits. Any immediate concerns will be raised as soon as they arise so that there is enough time to resolve matters.
• Business Premises Your solicitor will need to check and handle the transfer of the existing lease or negotiate terms for a new lease. If the business premises is freehold, she will raise any enquiries and carry out any searches at the local land charges department and land registry to ensure there are no adverse entries that could conflict with your interests as the new owner of the business and premises.
• The Sale and Purchase Agreement In most cases, the vendors solicitors will prepare a sale and purchase agreement setting out the agreed terms of the business transfer. The content of the agreement will often be subject to a series of negotiations and re-drafting between the solicitors involved. Once the sale and purchase agreement is agreed, your solicitor will exchange contracts on your behalf and agree a date for completion. Completion will be subject to finances, leases and or contracts. A good solicitor will explain the implications of the agreement.
• Other issues arising from the Business Transfer − You may require advice and assistance in successfully transferring any license with which the business trades − If there are any employees within the business then you will also require advice in relation to the the transfer of the employees under the TUPE Regulations and your obligations towards them.