Issues to Consider When Buying a Business
When contemplating purchasing a business, you have some major issues to sort through, including:
Type of Deal. What kind of deal will it be — purchasing the assets of the business or purchasing the stock?
Confidentiality. If the seller will be sharing confidential information, such as financial statements and customer lists, the buyer will probably be asked to sign a Confidentiality Agreement.
Letters of Intent. Consider whether signing an Acquisition Letter of Intent makes sense before you invest a great deal of time and money.
Due Diligence. Make sure you have thoroughly checked out the business you're buying — its financial performance, assets, liabilities, contracts, employees, and more. Click here to view a sample Due Diligence Checklist.
Definitive Agreement. You'll need a comprehensive definitive agreement setting forth the terms of the acquisition.