DUE DILIGENCE: Legal case studies with solicitor Manny Wood.
DUE DILIGENCE: Legal case studies with solicitor Manny Wood. jacoblund

Looking for a seachange?

GORDON and Janice are in their 50s and the children recently moved out of home.

While holidaying they decide it's time for a seachange and start looking to buy a business on the coast.

They discover a takeaway business and make an appointment to see a solicitor with good local knowledge.

The solicitor informs them the first step is to undertake due diligence which means obtaining copies of the business books to ascertain whether it is viable.

He recommends Gordon and Janice retain an accountant to assist with this process and they are also advised to discuss establishing a company or family trust to run the business.

Their solicitor advises them to talk with employees of the business, neighbouring shopkeepers and to their bank about obtaining finance.

In the meantime the solicitor obtains a copy of the contract for the sale prepared by the vendor's solicitor.

The current lease is examined to see what plant and equipment is involved and the solicitor identifies continuing employees and any restraint of trade provisions before the clients are advised of the proposed settlement date and penalties to be incurred if settlement is delayed.

Janice discovers the vendors are selling the business because they are finding it "too much”.

She also discovers another takeaway business will be set up nearby and according to social media there are adverse comments about the business.

After conducting due diligence and receiving proper advice, Gordon and Janice decide not to proceed with the purchase.

Fortunately, they soon find a suitable business and begin their seachange early in the new year.

For Manny to address legal issue write to manny.wood@ticliblaxland.com.au or call 6648 7487.