Buying a business

Any financial investment requires a thorough evaluation of the risks and likely returns. This could not be more true than in the case of a proposed acquisition of a business.


The importance of conducting thorough financial and legal due diligence cannot be overstated however in practice, due diligence is often overlooked or avoided because of its time-consuming and costly nature.


A business decision is only as good as the information upon which the decision is based otherwise everything is left to chance. Your due diligence investigations reveal the information on which your decision is based.


Buying a business requires the assistance of professionals including accountants, and solicitors.


The degree and extent of due diligence undertaken will partly depend on the amount to be invested. The greater the purchase price, the more extensive the due diligence. However, doing less due diligence on a lower value business does not make the investment in a lower value business less risky.


Our practice director Darin Draper is a certified practicing accountant and solicitor. He has extensive experience in the legal, financial and taxation aspects of business acquisitions.

What are the steps in a business purchase?:

Step 1 – Obtain copies of financial statements and other relevant documents in order to form a judgement as to likely value of the business. You will require the assistance of your accountant in this regard. Consider whether a specialist business valuation should be obtained.
Step 2 – Indicate your readiness to make an offer and request a draft contract from the seller. It is normally the seller’s solicitor who drafts the contract.
Step 3 – Seek advice from Turbo Legal in relation to the terms of the draft contract. We would normally recommend the inclusion of an appropriate due diligence provision to facilitate a thorough and careful evaluation of the business.
Step 4 – Establish an appropriate business structure and applicable registrations before executing the contract of sale.
Step 5 – Conduct due diligence enquiries in participation with your preferred professional advisers such as your accountant and financial planner.
Step 6 – Complete the contract on the date stipulated and commence trading.

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