Tuesday, 25 October 2011
Protect yourself… confirm your deal in writing
The comprehensiveness of the offer depends to some extent upon the business being bought and sold and the parties involved. However, there are a number of conditions typically standard to a business transaction. Two of the most important clauses in our offer make the transaction contingent upon your Lawyer reviewing the legal language of the offer and your Accountant's analysis of the financial statements.
As a Buyer, you will want your Accountant to review the financial data to verify the cash flow that has been represented by the Seller. Your Accountant will probably want to see the Seller’s General Ledger, Bank Statements, Sales Tax Reports, etc. There will be a specific time period to execute this review, upon receipt of the required documents.
If there is a promissory note, or vendor-take back, the Seller will also ask the Buyer to supply documentation in order to review their credit worthiness.