Due Diligence Tips for Buying a Business – Part III

LIABILITIES Compliance with bulk sales laws for asset purchases: • Make sure the bulk sale notifications specified by local law are complied with.  The effect of failure to comply with the bulk sales law enables creditors to “follow the assets” and have valid claims against the new owner (the buyer). • Provide in the asset purchase/sale agreement …

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Due Diligence Tips for Buying a Business – Part II

In following the story about Leonard and Sylvia here are some tips on assets that may save you disappointment after the deal is done. ASSETS Cash: • Cash is generally not included in the sale.  However, cash accounts should be reviewed for large and unusual transactions in the period preceding the deal. Accounts receivable: • Obtain and …

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Due Diligence Tips for Buying a Business – Part 1

Leonard and Sylvia Buy a Business Leonard and Sylvia sold their sheet metal manufacturing plant in Pittsburgh and decided to move to sunny Phoenix, Ariz.  They wanted to buy another business and, through a business broker, found a high-tech electronics manufacturing company that was for sale.  Leonard and Sylvia thought “manufacturing is manufacturing,” whether it …

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