They say there are many ways to skin a cat. The same can be said for buying and selling businesses.
Oftentimes, prospective sellers of businesses are not aware of exactly what they are selling when they place their businesses on the market for willing purchasers to purchase.
Do you want to sell the shares in your business or the assets that your business owns?
Can the purchaser request documentation from the seller about the business before signing an often daunting looking sale of business agreement?
Both the seller and the purchaser to these agreements are sometimes not aware of the rights and obligations that can be imposed on them.
It is of paramount importance to obtain the advice of both an Attorney and an Accountant when entering into negotiations surrounding the sale of a business and subsequent signing of sale agreements.
The attorneys’ role in the negotiation is to ensure that the offer to purchase the business contains all the material terms that will eventually form part of the agreement, including a non-disclosure and confidentiality agreements.
The role of the accountant is to ensure that the necessary due diligence is executed correctly, in the parameters of any suspensive conditions that are outlined in the offer to purchase.
Both the attorney and the accountant also have a duty to ensure that advice is given on the different options to purchase or offer a business. Will the sale fall under a purchase of shares? Or will the sale be a sale of the business assets of the business?
There are many rights and responsibilities for both a seller and a purchaser. The above outlines very briefly the questions that can be asked in a consultation with your attorney when you are selling your business or looking to purchase one.
If you are either looking to sell your business or wanting to buy into a new venture, we suggest that you obtain expert legal and accounting advice.
At Cari du Toit Incorporated Attorneys, Notaries and Conveyancers, we specialise in the negotiation of offers on businesses, and drafting of sale agreements in relation to businesses.
Should you wish to set up a consultation, please feel free to contact Cari du Toit, a director at Cari du Toit Incorporated Attorneys, Notaries and Conveyancers for a consultation.