Investing in, or acquiring a business

Before you decide to invest in, or buy a business, it may be wise to pause and consider – do you really know what you are paying for?

There are many aspects of a business that will not be apparent upon casual observation. For example, unless the business discloses it, you may not know much about:

• Existing agreements and obligations between the business and its suppliers/landlords/lenders/customers/etc
• Actual ownership of the business – e.g. ownership of trademarks, etc

Our team offers corporate due diligence at affordable fixed rates to help you to answer these questions and decide if it is worthwhile to invest in the business.

You may not decide to purchase a business outright. As an alternative you may decide instead to invest in it. Investment in a business takes many forms, such as the purchase of shares, a joint venture with a profit-sharing element, etc. When investing, it is also important to consider your exit mechanism – how will you cash out your investment?

Our lawyers will be able to provide advise on the various options and mechanisms that are available.

The types of documents and agreements that businesses typically will require at the beginning are:

• Corporate due diligence
• Term sheets
• Joint venture, investment, and shareholder agreements
• Franchising agreements
• Non-disclosure and confidentiality agreements

Not all investments will require the full suite of agreements and documents. We understand that businesses have a limited legal budget when starting out. Speak with our experienced corporate lawyers to work out what you do not need, in addition to what may be useful.