Starting your own business from scratch and building it up into a profitable enterprise can take years of hard work. That’s why many people with aspirations to own a business often decide to buy a pre-existing small business rather than starting with a blank slate.
Saying that, buying a small business in the UK is still a complicated procedure. One must always ensure that due diligence is carried out, and that the right deal is struck. That’s why choosing an experienced solicitor is so important.
When buying a small business there are usually two options:
An asset, or share purchase. An asset purchase is when you buy the assets and goodwill only, and a share purchase is when you buy shares of the company this will include the assets, the liabilities, the property, the debts and the bank accounts.
Things to keep in mind
Most sellers will want to keep the potential sale of their small business confidential, so there is usually a clause in the contract preventing parties from releasing details of the sale.
If the business is run from a rented property, the landlord will need to give consent to the transfer of the property to the buyer. It is very important that this transfer is handled in a professional and diligent manner. The landlord may also require a personal guarantee from the new tenant.
Financing the purchase of a small business
Buying a small business can be very expensive. So if you want to invest in a small business but don’t have the capital to go it alone, you could consider obtaining finance to fund your dream.
Things to look out for
When looking to buy a viable business it is important to carry out due diligence. Looking at the past performance of the business is important, but it is also imperative to look at future orders,
staff contracts, any ongoing contracts or assets that may be on lease.
As you can see, there is a great deal to think about when buying a small business. Kaiser Solicitors can help you negotiate a good deal, and will ensure that no stone is left unturned.
