During the pandemic, we’ve seen many enquiries from people wanting to buy or sell businesses. If you’re looking at a work-life change yourself, here are some of the priority legal issues
There’s a well-known quote from Steve Jobs, the co-founder of Apple, that, “Innovation is the ability to see change as an opportunity, not a threat”.
Many people appear to have taken this to heart during the pandemic. They see this as a good time to make a life-change, or pursue opportunities linked to technology and the shift to digital ways of working, buying and socialising.
"The fine print of contracts and terms & conditions with suppliers and customers is not the most glamorous area of running a business, but getting the detail right here can have a huge impact later."
For anyone thinking about buying or selling up, here are six key legal issues to consider as part of your due diligence processes and contract negotiations.
Funding
There are many routes for raising finance, including bank loans, private equity, even crowdfunding. Each one has its own pros and cons, and legal considerations.
Structuring the deal
Different structures may be worth exploring here, such as deferred consideration, earn-out mechanisms and tranched payments.
Protecting the brand and intellectual property
The company’s brands, designs, ideas or technology solutions are important assets and should be protected when you buy or sell.
Contracts
The fine print of contracts and terms & conditions with suppliers and customers is not the most glamorous area of running a business, but getting the detail right here can have a huge impact later.
Commercial property
A topical issue since the buyers of a business may not want to buy its unused offices. There are various avenues for demerging a company’s property interests from its trading interests.
Employment contracts
These fall outside ‘corporate’ law but are important for business owners. You want lawyers who can handle both aspects seamlessly.
There’s a lot to think about here, but as with so many other areas of law, it’s better to prevent problems than have to firefight them later. Some good advice at the outset can make all the difference to people’s dreams of being Scotland’s next ‘unicorn’ or making a lucrative exit.
