Issues to Consider When Buying a Business

When contemplating purchasing a business, you have some major issues to sort through, including:

• Type of Deal. What kind of deal will it be — purchasing the assets of the business or purchasing the stock?
• Confidentiality. If the seller will be sharing confidential information, such as financial statements and customer lists, the buyer will probably be asked to sign a Confidentiality Agreement.
• Letters of Intent. Consider whether signing an Acquisition Letter of Intent makes sense before you invest a great deal of time and money.
• Due Diligence. Make sure you have thoroughly checked out the business you're buying — its financial performance, assets, liabilities, contracts, employees, and more. Click here to view a sample Due Diligence Checklist.
• Definitive Agreement. You'll need a comprehensive definitive agreement setting forth the terms of the acquisition.

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For a detailed review of the issues to consider when buying a business, click here to view a Checklist for Acquisition of a Private Company.