Key Legal Considerations When Buying or Selling a Business
Business transactions require careful legal and commercial consideration from the earliest stages of negotiation.
Buying or selling a business is a significant transaction that may involve numerous legal, financial and operational considerations.
Due Diligence
Due diligence involves investigating important aspects of the business before a transaction is completed. Depending on the circumstances, this may include reviewing contracts, assets, liabilities, employment arrangements and regulatory matters.
The Structure of the Transaction
A transaction may be structured in different ways. For example, parties may consider a share transaction, the sale of business assets or another commercial structure depending on their objectives and the circumstances of the transaction.
Representations and Warranties
Transaction agreements often contain representations and warranties concerning the business. These provisions may play an important role in allocating risk between the parties.
Parties should carefully consider the transaction structure, legal documentation, regulatory requirements and the allocation of commercial risk.