5 MATTERS OF CONCERN POST EXCHANGE IN A BUSINESS PURCHASE

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THE PBL KEY 5 ARTICLE
KEY 5 MATTERS OF CONCERN POST EXCHANGE IN A BUSINESS
PURCHASE

In my last e letter I set out the Key 5 matters to worry about before you exchange a Contract to buy a business. So what
about after exchanging contracts? What are the 5 key matters of concern?

1. Make sure EARLY ON you are going to get your lease or licence (for example, a liquor licence) and its terms are acceptable. Often we find that any delay in approaching landlords and licensors to have them consent to a new lease or licence or transfer of an existing lease will lead to a delay in completion and the possibility of risking your deposit and termination.
2. Don’t delay the settlement . If you do no doubt there will be a penalty interest clause that will hit you with an increase in the amount you will pay when settlement eventually does occur.
3. Ask the vendor questions to satisfy yourself about any outstanding issues. This is known as requisitions in legal speak. You are allowed to ask these questions under the contract terms normally but it is essential to ask the RIGHT questions and not just rely on a pro forma.
4. Make sure the vendor has paid out the employees or there is an appropriate adjustment under the contract. Remember, that unless the adjustments are made and employees are paid some of the employee entitlements will carry forward to you as the new owner of the business.
5. Carry out your final due diligence prior to settlement. This includes ensuring that you re-inspect the stock (in order to do a stock take), plant and equipment to make sure it is still as set out in the inventory and undertaking final PPSR searches to ensure none of the plant and equipment is encumbered at that point or if it is, it is going to be paid out on settlement.

If in any doubt about these steps then we suggest you consult us to discuss your matter and preferably BEFORE you exchange. Contact us on (02) 4305 3500

If you need help in buying a business please contact us on 4305 3500[/vc_column_text][/vc_column][/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” scene_position=”center” text_color=”dark” text_align=”left” overlay_strength=”0.3″][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” width=”1/1″ tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid”][recent_posts style=”default” category=”all” columns=”4″ posts_per_page=”4″][/vc_column][/vc_row]