Britton Law, P.A.
Free Consultation For Injury Cases
910-401-3356
Due to precautions related to COVID-19, remote consultations via teleconferencing, Facetime or Skype are available. Please contact our office to discuss if this option is appropriate for your situation. Let’s all stay healthy and safe.

Mistakes to avoid when purchasing a company

Prospective North Carolina business owners need to gather as much information as possible prior to buying a company. Performing due diligence can help a buyer make a purchase that is more likely to be a profitable one. Furthermore, it is important that a buyer has proper liquidity prior to closing the deal. In many cases, the buyer will need to put up 15 percent of the purchase price when getting a loan from a bank.

Liquidity is also important after the deal as well. Buyers should have money for unexpected expenses such as hiring new employees after the sale is finalized. In addition to liquidity, a new owner will need to have working capital available. As part of the due diligence process, a prospective owner should look at how much money will be available during the first 90 days of ownership.

Understanding the financial side of a company is only one step in the purchase process. A buyer will also need to understand why the purchase is being made. Reasons to buy a business could be to obtain an appreciating asset or to gain more control over a career. Generally speaking, a person should buy a business in an industry that he or she knows something about to increase the chances of success.

Prior to engaging in these types of business transactions, it may be a good idea to consult with an attorney and other relevant professionals. An attorney may be able to find out if a company is the subject of any lawsuits or other issues that a buyer may become responsible for. Ultimately, it may make it easier to craft a favorable deal for the buyer.

No Comments

Leave a comment
Comment Information

Send Us An Email. We’ll Listen.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Britton Law, P.A.
2850 Village Drive, Suite 206
Fayetteville, NC 28304

Toll Free: 888-811-9738
Phone: 910-401-3356
Fayetteville Law Office Map

Britton Law, P.A. Office

Call Our Law Firm:

910-401-3356 ~or~ 888-811-9738
Mistakes to avoid when purchasing a company | Britton Law, P.A.