What to Consider When Acquiring a Business

Buying a business is a major step, and one that can open the door to new opportunities, growth, and financial success. But beyond the purchase price, there are critical legal and practical considerations to ensure the acquisition is a smooth and secure investment.

Conduct Thorough Due Diligence

Before signing anything, undertake a comprehensive due diligence review. This means digging into the business’s:

• Financial records – to confirm profitability and identify risks.
• Contracts and obligations – including leases, supplier agreements, and outstanding debts.
• Operational structure – to ensure there are no hidden liabilities.

Due diligence is your chance to confirm that the business is what it appears to be.

Decide on the Structure: Asset or Share Purchase

One of the most important choices is whether to acquire the business through an asset purchase or a share purchase:

• Asset Purchase: You select the assets you want (such as equipment, stock, or goodwill) and avoid unwanted liabilities.
• Share Purchase: You acquire the company in full – assets and obligations included.

The right structure depends on your goals, tax considerations, and risk appetite.

Nail Down the Purchase Agreement

The purchase agreement sets out the terms of the deal. It should clearly outline:

• The purchase price and how it will be paid.
• Which assets and liabilities are included.
• Warranties and representations from the seller, providing you with important protections.

Consider the Employees

If you’re purchasing the business assets, you’ll need to decide whether to take on existing staff. Review employment contracts and be aware of any entitlements or obligations you may inherit. Staff transitions must be handled carefully to remain compliant with workplace laws.

Check Licences and Permits

To operate legally, you’ll need to ensure that all licences, permits, and registrations are either transferable to you or that you can obtain new ones. Overlooking this step can delay operations and create unnecessary risks.

Buy with Confidence

A business acquisition is more than a financial transaction – it’s a legal commitment. With the right preparation and advice, you can avoid surprises, reduce risks, and set yourself up for long-term success.

At Argon Law, we guide business owners through every stage of acquisition, from due diligence to finalising the purchase agreement.

Thinking about buying a business? Contact us today for tailored legal advice.