There’s lots to consider when taking over an existing business. You start with lots of research, about the business, its market and industry, suppliers, customers, and the competition. If you have found the venture that is perfect for you, congratulations! This is an exciting time!
So you’ve registered formal interest, taken care of due diligence, and you’re ready to sign on the dotted line and buy the business. Now it is important to make sure that all the important contracts get transferred from the previous owner to you. It’ll help you make a much smoother start and can save you a lot of trouble in the long run.
Business Law expert Paula Lines from The Law Shop has put together this handy checklist of agreements and accounts that you must transfer to your name when taking over an existing business:
- You’ll need access to all phone and fax numbers, PO Boxes, email addresses, communication apps and other ways that customers and suppliers use to contact the business.
- The company website. This should include the domain name, web hosting, registrar and administrator details if applicable, access to the Content Management System (CMS), and the newsletter database.
- All social media accounts. Think Facebook, Instagram, Twitter, LinkedIn, Pinterest, YouTube, TripAdvisor, and more. Also check if there are no old social media accounts lurking in the background, or online listings with outdated or incorrect information. Close or change these as soon as you can.
- Make sure to transfer the rights to any registered trademarks.
- What about the EFTPOS machine? Often these are leased, so you’ll need to have that lease transferred to you and most importantly, ensure that payments go to your bank account.
- Check on any leased or “borrowed” items – often the drink supplier for a dairy provides the fridge, and you might struggle to sell cold drinks if they take it back on the settlement date.
- Key supply contracts – if you absolutely must buy 100 widgets a month from Widget Co, you’ll need to know exactly what Widget Co is going to supply to you, and who the contact person is.
- Consider the key sales contracts. If the bulk of the business’ income comes from one or two customers, you’ll need to be sure that they are going to continue to buy from you.
Of course it all depends on the type of business you are buying, and on your plans for the future, but it goes without saying that businesses that have their documentation in order are better protected. If you’d like to find out more, or discuss your specific circumstances, get in touch with The Law Shop any time. Their expert Business Law team can help you get things right from the get-go.
You’ll find The Law Shop’s Tauranga office on 1239 Cameron Road in the RSA building, and the Rotorua office is based at 1268 Arawa Street. Give them a call on 07 349 2924 for Rotorua or 07 572 5272 for Tauranga, or visit www.thelawshop.co.nz.