When buying a house, you may wish to ask the current owner about their motivations for selling. Our team, in conjunction with you and your trusted advisors, will run a due diligence investigation on the business to ensure that everything is as it seems.
Are there any pending court cases over intellectual property? What is the current state of their contracts with employees, suppliers, building owners or, service providers? These are the kinds of questions that we answer with our due diligence findings.
You need an experienced team of business lawyers who can check the fine print and make sure the business is above board.
Goodwill refers to the potential earnings of a business. This calculation takes into account, among other things, the customers, location, staff, and efforts the current owner has put into the business. It can be difficult to determine goodwill, but it's imperative to have a figure before buying a business.
If a significant part of a business's value is tied up in goodwill, we may recommend a 'Restraint of Trade' clause in the Sale and Purchase agreement. This prevents the owner from selling to you, then starting a competing business across the road using the networks and contacts they sold with the business.
Can your business take over any leasing agreements? If the location is a big part of the business's success, we can review the lease to make sure the terms are acceptable and there are no surprises for you.
Making an Offer
Buying a business in Christchurch is often more complicated than buying a house. Any offer needs to be legally watertight so that both parties understand their obligations. Do you want a buffer period after getting inside the business to check the books thoroughly and conduct financial due diligence? Would you prefer to have a gradual handover, where you pay off the sale price from your business's profits?
Our team of business lawyers can assist in any questions you may have regarding making an offer on a business.