This article originally appeared in the October 2017 edition of Glasgow Business.
Buying or selling a business, whether as an asset transaction or a purchase or sale of a company is not like buying a physical item, such as a pair of shoes, where, if you like the look of them and they feel comfortable when you try them on, that is probably enough to encourage you to buy.
Businesses are more than the physical assets the business owns. Businesses have a history of legal transactions creating rights and obligations, benefits and liabilities that can only be assessed by careful and detailed due diligence.
If a seller is not fully prepared, the buyer’s due diligence may well identify problems which could cause the buyer to reduce the price offered or abandon the purchase altogether.
The due diligence is also liable to take longer if the seller has not assembled all the information the buyer will ask for. The prepared seller, however, can avoid these delays and difficulties by working with the lawyer and accountant who will handle the sale to ensure all the information which will be requested is gathered together and critically assessed in advance of the sale process getting under way.
Jack Gardiner is a Partner in Turcan Connell’s Business Law Team