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Entrepreneurs Get Ready!

Ray Crudgington, head of the Commercial Department at Grant Saw Solicitors LLP looks at how businesses may respond to the economic upturn.

 

As the country emerges from the recession many small business owners will look to sell up and escape the financial pressures that they have been under. Entrepreneurs may look to grow their organisations by acquiring another business at a good price. The strategic, financial and practical issues need to be thought through carefully. Sellers need to think about what they have to sell and the liabilities they need to pass on. It may be important to ensure that both parties are committed to confidentiality before negotiations begin so as to avoid giving away commercially sensitive information “for free”.   Buyers need to be sure that they are getting what they are paying for.   

Some key questions to ask are:

 

·                 Who picks up the existing liabilities of the business ?

·                 Is the business worth anything without the seller personally involved in it ?

·                 What about employee transfer ?

·                 Is there a landlord involved ?

·                 Are any assets on HP or finance ?

·                 Who gets rights to telephone numbers and the website ?

·                 How will the buyer and seller be taxed ?

 

There is a lot to consider and it is important not to get caught up in enthusiasm to do a deal without clear aims and objectives.   For many this will be the first – and maybe the only – time that they will buy or sell a business.   Clear legal advice from an experienced commercial lawyer at an early stage can limit the risks and help focus on the key issues which need to be addressed to get the deal “done”.

 

If you'd like to talk to a commercial solicitor and find out how we can help you, please call us on 020 8858 6971 or e-mail commercial@grantsaw.co.uk

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