In parts one and two of our Buying a Business series we focussed on:
In part three, we're asking: What contracts are in place for the current business?
1. Are there any written contracts in place?
Can these be transferred to you as the new owner or do you need to set up new ones? If you need new ones, get permission to contact those people early on so that you have time to negotiate terms and complete to avoid any delays in delivery.
2. Are there any informal agreements which have really favourable terms you would like to continue?
Again, try to get contact with the provider quickly to give you time to negotiate the same deal.
3. Are any of the agreements in the name of the business or individual?
If you buy the company, you will be responsible for those debts so ensure you ask for full details and get copies of any agreements.
4. Are there any agreements you want ending before completion?
There may be minimum notice periods before the agreement will end so ensure that this is covered either with the seller retaining the contract or the purchase price being amended to reflect any additional payments.
5. Are there any staff?
If you intend to make any changes to the terms and conditions of existing staff from day one, this needs to be dealt with before completion. Get as much information as quickly as possible about what the current terms and conditions are so you can make a decision. Don’t forget to ask about informal arrangements such as free lunches or discounts. Also, ensure you deal with accrued holiday pay and that the seller agrees to pay for any due up to the date of completion.
Emsleys Solicitors’ Commercial team can help with all aspects of selling or buying a business. Contact Angela Macready on 0113 201 4900 for a free initial consultation and no obligation quote.