THE BUSINESS PURCHASE LAWYER YOU CAN TRUST

Buying a business is an exciting process that might seem confusing. Understanding the ‘ins and outs’ of the process will provide the strongest foundation for your purchase, and ensure that what you buy is what you expected.

Our experienced business purchase lawyers are here to help break the process down for you and tailor all legal solutions to your specific needs.

 

ADVANTAGES AND DISADVANTAGES OF BUYING A BUSINESS

Prior to purchasing a business, it is important to weigh the advantages and disadvantages of buying a business. These may vary depending on the type of business you are buying and how well it is doing commercially. Our business lawyers can help you with the process of purchase agreements.

 

COMMON ADVANTAGES OF BUYING AN EXISTING BUSINESS INCLUDE:

• The business is already established and has a proven business structure, including an organisational framework, client base and financial history, allowing you to know what you are dealing with.
• Businesses will often have pre-existing staff who will enable a smooth transition for your takeover.
• You will have immediate access to the established business assets, such as real estate, equipment, machinery and inventory.
• There is no period with minimal cash flow, as the business is already running and, presumably, has been for a while.
• You do not have to go through the start-up process, which can be expensive and confusing in itself.

 

COMMON DISADVANTAGES OF BUYING A BUSINESS INCLUDE:

• Purchasing a business can be expensive upfront.
• If the business is underperforming, it may be difficult and costly to make it profitable.
• Existing staff may not like the change in ownership.
• You may need to purchase new equipment or move premises due to certain factors.

Many of these disadvantages will be obvious when inspecting the business at first instance, when conducting due diligence investigations; and can often be negotiated in the contract.

 

DUE DILIGENCE

One of the most important steps for you as the purchaser of the business will be conducting due diligence investigations. Due diligence is often conducted prior to the contract being signed but there may also be a special condition allowing for the purchaser to conduct due diligence prior to the contract going unconditional. In both cases, it is important to ensure that you conduct these investigations.

Due diligence is the most efficient method to investigate whether the purchase of the business will be in your best interests. Depending on your negotiations, it provides you access to confidential information which enables you to evaluate any risks you may incur after purchasing the business and whether the business is worth the value you are purchasing it for.

Such due diligence investigations may include but are not limited to reviewing:

• income statements and records of accounts;
• details about stock and equipment;
• intellectual-property assets;
• contracts with contractors, clients, and staff; and,
• credit and tax history.

 

THE CONTRACT FOR PURCHASE

Businesses can often be purchased in two different ways which will be reflected in the type of contract you have. The two types of contracts are:

• Purchase of assets in the business – this option is preferable where the assets of the business are encumbered. By purchasing only the assets of the business, you are able to determine and purchase only the assets that are unencumbered. This prevents you from any potential liabilities associated with the previous owner of the business.
• Purchase of shares in the business – buying shares in a business means you will be purchasing all assets of the business which exposes you to any claims that someone may have against the business.

 

WHAT ARE THE COMMON PROVISIONS INCLUDED IN A PURCHASE CONTRACT FOR A BUSINESS?

The terms of your business contract will vary depending on your circumstances and the outcome of your negotiations with the seller. However, there are standard terms that are commonly found in these contracts, including:

• Purchase price;
• What you are purchasing (e.g., assets only, or shares and assets);
• Payment method (e.g., by instalments, by loan, etc.);
• Restraint of trade (i.e., preventing the seller from opening up a similar business near the one you are purchasing).

It is important to seek legal advice when you have a contract to purchase a business as a qualified solicitor will be able to assist you in your negotiations with the seller and finalise the sale agreement. This will ensure your own interests are protected during and after the sale.

 

BUSINESS ACQUISITIONS

A business acquisition is a strategic process where one company purchases another to expand its operations, enter new markets, gain assets, or increase market share. It involves a comprehensive assessment of the target company’s assets, liabilities, financial health, and legal standing.

Business acquisitions offer valuable opportunities for growth and diversification but require careful planning, negotiation, and legal expertise to achieve desired outcomes while minimising risks. A business acquisition lawyer will provide comprehensive support for businesses engaging in acquisitions, helping clients make informed decisions and navigate the complexities of the process. At GLG Legal, we can do all the above and more, while tailoring the process specifically to the needs of your business.

 

BUSINESS MERGERS

A business merger is where two or more companies combine into a single entity, often undertaken to achieve mutual growth, cost-efficiency, market dominance, or synergy.

Business mergers offer opportunities for enhanced competitiveness and market presence but require meticulous planning and legal guidance to navigate the complexities involved. GLG Legal provides comprehensive support for businesses embarking on mergers, helping clients navigate the intricacies of merger transactions and achieve their strategic objectives.

For personalised advice and expert legal assistance in business mergers, contact GLG Legal today.

 

HOW CAN GLG LEGAL HELP?

We can assist you with business acquisitions, purchases and mergers through:

• • Conducting due diligence
  • Negotiating terms
  • Drafting and reviewing contracts
  • Protecting intellectual property rights
  • Crafting partnership agreements (including joint venture agreements) 
  • Handling employment-related matters (including employee entitlements and handling existing contracts)
  • Ensuring regulatory framework compliance
  • Dispute resolution
  • Risk assessment
  • Business structure advice
  • Handling commercial leases
  • Assisting with financing arrangements, often in conjunction with financial advisers

  We also provide services for the business sale process. If you are looking to sell your business, get in touch with one of our business sale lawyers today.

 

CONCLUSION

Apart from a greater awareness of the business sales process, an expert business purchase lawyer from GLG Legal can help with two key components of the sale. Firstly, each document, from confidentiality agreements to the final business sale contract, should be reviewed by a legal professional. This will ensure your rights are protected and you are aware of each clause as it pertains to the ongoing business operations.

The second benefit is legal due diligence. Some of the key points this encompasses are:

• Confirming legal ownership of assets;
• Identifying past, present and pending lawsuits;
• Examining existing contractual obligations.
• Ensure you understand what you’re purchasing before proceeding. Get straightforward advice from GLG Legal and avoid potential pitfalls when it comes to purchasing your next business.

Get straightforward advice from GLG Legal in Brisbane and avoid potential pitfalls when it comes to purchasing your next business. We have extensive experience advising clients on their business purchases, mergers and acquisitions.

At GLG Legal, we provide strategic legal advice best suited to your individual circumstances. For a business lawyer that you can trust to guide you through all legal issues, choose us.