Buying a Business can take a number of forms and we act and advise on all of the options for purchase.
The purchase of a Business can be as small as buying the goodwill and business name of a well established business without acquiring any of its assets to a full scale outright purchase of a Limited Liability Company by the acquisition of all its shares.
The degree of investigation needed to protect yourself depends on the model of purchase of the business. For example a business may have a well established trading name with considerable goodwill which is the primary purpose for the acquisition of the Business. However the Business may also hold valuable Leases in prime retail or office locations. Buying the goodwill and Intellectual Property (trade marks, patents, copyrights and all acquired intellectual property rights)of the company only will not give any automatic rights to these leases or properties.
In this case, any purchaser would also have to do individual deals with each of the Landlords in question for the desired location for the transfer of the Leases into the name of your Company or Purchase Vehicle. Often in each individual such case the costs for the Landlord’s consent falls to you the purchaser in addition to the purchase price agreed with the target business for sale. This should be factored into your costs projections for any purchase.
The transfer of the Lease in each case will typically require an investigation by the Landlord of the financial strength of your purchase vehicle whether this is you yourself personally or the financial strength of the Company to whom the Lease is to be transferred.
If this is the route by which you purchase a Business then these are matters that should be taken in hand by you before ever committing to the purchase of the business. You must ensure that these transfers are available, if they are an intinsic part of the value of the business you are buying.
You should also investigate the Lease or title in each case to confirm that everything is in order (for example Local Authority rates are paid up to date etc.) prior to completing the purchase of the business itself.
You should also note that buying a business by a purchase of its assets and goodwill only may not necessarily exempt you from the application of the Transfer of Undertakings and the Protection of Employees (TUPE) Regulations. You may still be obliged to employ the existing employees of the business in sale. It is a question of fact in each case.
You can also review our following section on buying a business by the purchase of the company’s shares.
If you are considering buying a business why not contact us for a free consultation at the start so that we can discuss your plans for purchase so that you can choose the type of purchase that best suits your overall ambitions for the business in question. Our fees as always are reasonable and transparent and we will discuss fees with you at the outset.