Overall you can't. That is why before entering into an agreement to buy a business it is essential to be fully aware of the financial viability of that business. We will therefore issue pre-contract due diligence enquiries to the seller of the business regarding the circumstances of the business. Your financial advisors will more than likely undertake financial due diligence. As a result of these responses, further negotiation as to the terms of the deal may be required.
It is important that the agreement for the purchase reflects all of the things the seller has told you about the business. In the agreement for the sale of the shares or assets there will be a collection of warranties that the seller will give to the buyer. These warranties are statements about the affairs of the business and are likely to cover taxation, accounting, finance, employees and liabilities amongst others. Should these warranties be false the buyer will have the right to sue the seller for any loss suffered as a result. The warranties will usually be subject to any content disclosed by the seller to the purchaser and various seller protection clauses included in the agreement.
There is only so much protection the transaction documents can offer. Though they can provide information about the financial viability of the business and can also offer the possibility of taking some action should the business fail, they cannot be used to guarantee the new business will be a success. For this reason, the investigation of the business and the negotiating process becomes of paramount importance.
A member of our specialist Business Law team can provide assistance throughout the investigation of a business process.
11 Dec 2018
Forbes Solicitors has advised Heart of the Lakes and Fisherbeck Management Limited as they joined forces with…
Forbes Solicitors delivers 'fast response times' and demonstrates 'impressive industry knowledge'.
2018-19 edition Legal 500
Very thorough and precise with each contract and have made it very easy for us to feel very confident going into new territories, whether it being a different country or a different manufacturer.
Forbes was instrumental in ensuring Electric Coffee Co is able to meet its growth ambitions.
Electric Coffee Co
It is always a pleasure to deal with true professionals and specialists in their area and this is what you can expect when dealing with Forbes and, in our case, specifically Nick and Gemma.
Gareth & Janet Watson
The team not only provides professional and practical advice, but also takes a personal interest to understand the business and the matter at hand.
Leonard Curtis Business Solutions Group
The advice and service that we receive from Pauline and her colleagues is consistently professional, knowledgeable and efficient. They have a great ethos and are a pleasure to work with.
Focus Insolvency Group
What a pleasure to do business with Forbes - Pauline Rigby & Nick Pickup both understood my personal objectives and requirements
Former Business Owner
I would like to thank Jayne and the Business Law team for being so friendly, professional and patient throughout the sale.
We have been very happy with the professional service from Pauline Rigby and her colleagues in the Business Law team and the ease of purchasing our new business
Andrew M Jones
Internet Trading Ltd
I and the UCLan team wanted to acknowledge the support from your team, including Nick Pickup and Pauline Rigby. Their contribution has been much appreciated by both clients and our staff.
Head of Innovation and Enterprise
Sincere thanks for all the time, patience and professionalism from Pauline and Tricia in the completion of MAP12 contract terms and conditions.
Jayne & Anthony Mellor
It's a One Stop Shop as a legal entity, whatever problem we've got you've got someone to come and advise us or fix it
The Northcote Group
We have always found Forbes to be approachable and helpful and we look forward to a continuing professional relationship
Child Action Northwest
I have been extremely pleased with the legal team at Forbes and all their help
South Lakes Veterinary Centre
The team at Forbes have been professional, thorough, friendly and efficient from day one through to completion. We will certainly be using them again as we look to move our business forward.
S & L Wilson