You want to change career paths or take on a new level of responsibility, so you decide you are going to buy a business. It should not be an easy decision since there is an immense amount of work that goes into the process. It is hard to narrow down tips for buying a business since there is much that goes into an agreement. These three tips are some of the essentials when you consider buying a business.
Buying a business is a tremendous endeavor. Not only is the purchase of the business itself a huge commitment but so is the process beforehand. You do not want to make this decision without doing your due diligence. Take the time to figure out what you are interested in, determine if the business model has the chance of being successful, determine any risks, discuss why the business is for sale, and make sure it aligns with your budgets. There is a lot of research to be done to make sure that purchasing a business is the right move to make.
It sounds strange to say buy the assets and not the business. You will receive a better tax treatment since your taxes will be based on what you paid for them and not what the seller paid for. Another advantage is you do not assume any liabilities of the previous owner. There will, however, be liabilities included in the acquisition agreement. These liabilities include product liability, environmental liability, liability under bulk sales, and employee benefits. Every contractual agreement is different and should be negotiated with the help of counsel.
Hire a Professional
Hiring a business lawyer and an accountant will help you with the numbers and the paperwork. Accounts help to determine the assets, liabilities, and what possible earnings could be. A lawyer will help draft, proofread, and negotiate contracts during the purchase of a business. Having successful professionals can make purchasing a business a smoother process. Creating a successful beginning may create an easier life of your business. You will have a clearer picture before closing the deal.
**This article is for informational purposes only and is not intended to be legal advice. In relation to your individual situation, always seek advice specific to your circumstances from a lawyer.