Buying a Business
Business Law Topics
Buying a Business
There are a number of purchase options when you are considering buying a business.
For example it can be as small as buying the goodwill and business name (including domain name and website and social media accounts) without acquiring any of its other property. Alternatively it can involve a purchase of all (or a majority) of the shares a limited liability company.
The mode or method of purchase being used will influence the scale of investigations needed by the purchaser. If buying merely the goodwill and trading name, the investigations would primarily centre on the intellectual property of the company i.e. the business name, trademarks (if any), domain names and social media accounts. One the other hand a business may also operate in valuable locations. Buying the goodwill and IP only will not give any automatic rights to operate in these leases or properties.
In this event, any purchaser would need to organise with the business in sale and and each of the Landlords in question for the transfer or grant of the Leases to it. In each individual such case the costs for the Landlord’s consent will become an additional costs to the purchaser. This should be factored into your costs projections for any purchase. Also the Landlord will commonly seek proof of the “strength of covenant” of your purchase vehicle (if a company) by looking at its financial records.
Before ever committing to the purchase of the target business, these additional aspects would be need to be secured, if they are critical to the value of the business being acquired. The Lease or title in each case must be investigated to confirm that everything is in order (for example Local Authority rates are paid up to date etc.).
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. Purchasers could be nonetheless compelled to take on the contract for existing employees of the business in sale.
Please also review our dedicated Buying a Company section.
You should contact at the start us for a free consultation to discuss your purchase strategy. Our fees as always are competitive and transparent and will be agreed at the outset.