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Frequently asked questions
Do I need to take advice if I am just renting a commercial property or can I do it myself?
Some businesses do rent commercial premises without legal advice however, you need to have a good understanding about the obligations and potential liabilities you are taking on. For example you could be responsible for repairs and maintenance. You may also be trapped in an inflexible lease and find yourself renting from a less accommodating landlord if the property is sold.
Can I exit a lease now that I no longer want the premises?
If you sublet or assign the premises you continue to be the tenant under the original lease which does not usually remove all of your responsibilities and potential liabilities.
What are some questions I should ask when evaluating a business that is for sale?
Why is the owner selling the business? This is possibly the most important question and how the owner responds can direct the course of the buying process.
How are you being compensated? Check how much the current owners are earning.
Do you have immediate cash flow? When you purchase a business you are buying the earnings that go with it so will need to check if sales are declining for any reason.
What are your biggest business challenges? The owner may have some valuable insights here for you. It may be that the existing owner has reached their limit for growing the business and that their weakness is your strength.
Who are your major competitors? You will need to have your finger on the pulse regarding your particular market. Find out whether your business has any advantages over its competitors.
What can I expect in a Sale and Purchase of Business Agreement?
The agreement covers the sale of physical assets such as stock/plant and any intangible assets such as good will and intellectual property. The agreement will record the purchase price, deposit, any leased premises details, list of assets, a vendor warranty in relation to turnover, any assistance the vendor will give post settlement to handover the business and details of the restraint of trade to prevent the vendor setting up in competition with you. It is crucial that these details are recorded correctly to protect you and your business going forward.