In part due to the struggles of the COVID-19 pandemic, many small businesses are going up for sale in 2020, or owners might be particularly amenable to an offer to purchase the company. Buying a business can be a lucrative venture, especially if your enterprise has the resources to build up and refresh the acquired business. However, it is important to have the guidance of a business lawyer in Beverly Hills to help conduct due diligence to ensure the transaction is a wise move.
Due diligence involves investigating the details of the target business to identify any possible concerns and decide whether the purchase is worth it. This process involves many complex steps, including:
- Examining all financial records, including cash flow statements, balance sheets, tax returns, and more
- Looking at accounts receivable
- Valuing the inventory, equipment, and other assets of the company
- Reviewing real estate and lease agreements
- Comparing past projections and results
- Obtaining a summary of business debts and payment schedules
- Reviewing all operating agreements, shareholder agreements, bylaws, and similar documents
- Reviewing all existing contracts to which the company is a party
- Learning whether there are any pending legal cases involving the company
- Reviewing marketing strategies and conducting marketing analysis
- Researching industry trends and competitors
In short, you want to examine all legal, operational, and financial information possible to get the full picture of the company. You also want to learn about the work environment, philosophies, and other intangible information to determine whether the acquisition is a good fit.
Meet with a Business Lawyer in Beverly Hills Today
Due diligence takes time and effort, and you want the help of the right Beverly Hills business attorney from the Law Offices of Jon H. Freis. Call 310.276.1218 or contact us online to discuss a possible business transaction or other legal concerns.