CONDUCT A DUE DILIGENCE CHECKLIST

When you are considering buying a business, conducting due diligence ensures you have access to important information about the business you’re buying. It’s the best way for you to assess the value of a business and the risks associated with buying it.

Due diligence should be incorporated into your Business Contract, unless it is carried out before the Contract is entered into.

Through the due diligence process, you thoroughly investigate all aspects of a business for sale. You look at the business operations, financial performance, legal and tax compliance, customer contracts, intellectual property, assets and other details, often within a time period specified in a Contract condition.

The information you collect during due diligence is highly sensitive and confidential. The seller might want you to sign a non-disclosure agreement before you access this information.

Typically a checklist consists of considerations toward:

REDUCE STRESS + MAXIMISE VALUE

The purchase of any business can be inherently fraught with stress and this can lead to factors such as buyer’s remorse. By entering into a business purchase contract that has been guided by an experienced conveyancing expert, you can greatly reduce the possibility of a mistake and enhance the value of the deal.

The legal experts at Central Queensland Conveyancing Centre are well poised to assist with the finer aspects of any commercial transaction and offer the wealth of knowledge that comes with experience spanning decades in practice.

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BUYING A GOOD BUSINESS

Buying an established business rather than starting a new business can be a good option for many potential business owners who want to ‘hit the ground running’. Established businesses come with an existing customer base and are already trading. However, you may also inherit any problems that the business has. You need to know exactly what you’re signing up for and be clear about your ability to run a business.

Buying a business is a complex and time-consuming process. You will need to investigate in detail the business you plan to buy, making sure it is feasible and has a well-developed market for its products or services.

You will have to check relevant business records, plans, and underlying operations, as well as familiarise yourself with your competitors and the industry as a whole. You will also need to check that the business has the appropriate licenses, permits, and registrations and find out which ones can be transferred to you.

Buying a business is a serious investment. You should always seek professional legal and financial advice before signing any documents.

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