With so much to think about – taking over a whole new enterprise is obviously no easy task – the earlier you seek expert advice on the legal aspects that you need to be aware of, the better.
Even before you sign any agreement to buy the business itself, the seller might well ask that you enter into confidentiality agreement. This will mean that you are under an obligation not to disclosure any of the information you receive during these initial discussions.
Then there are the Heads of Terms to consider. This is a non-binding document which lays out the key elements of the deal that is being proposed.
After this comes the “due diligence” procedure, which is key to ensuring that you won’t encounter any unexpected problems at a later date. This will include checks to ensure that the seller owns all the assets he/she is claiming and that there aren’t any existing agreements or ongoing disputes which could cause you problems.
Depending on the type of sale, you may be required to continue to employ some or all of the current employees. In these circumstances you will need to consult with the individuals concerned and advise of any intended changes which may have implications for them.
The Transfer of Undertakings (Protection of Employment) Regulations (TUPE for short) provides protection for the present terms and conditions of the existing workforce. It means that you may not find it easy to alter employment contracts, make redundancies or dismiss present employees.
It might be the case that you also have to consider how the assets of the business are to be transferred. Do the business premises have a lease? How long is it for? And can the agreement be transferred to you?
Last but not least, there is the sale agreement itself. You will want to be sure that the seller is giving you correct assurances. What guarantees and indemnities are being offered and do they give you sufficient protection?
All these terms might seem confusing, which is why dealing with an experienced solicitor can give you peace of mind that nothing will be overlooked.
Hethertons will work to ensure the whole process is as smooth as possible, enabling you to get on with running your new business! For further information or advice please call our Business Support team on 01904 528 200 and speak to Jessica, Jo or David.