When you are buying a business, you should not be taking a leap of faith. You should know exactly what you are getting, both in terms of the actual business and any potential liabilities. In every business transaction, you have the ability to perform due diligence on the business that you intend to acquire.
Due diligence is the process where you get “access to the books.” Due diligence should be an intensive process. If you have access to a document, you may be deemed to know its contents in the future if you ever filed a lawsuit. While you will get a certain amount of time to review the documents, you should ensure that your due diligence is robust.
Before you begin the due diligence process, you will be asked to sign a confidentiality agreement because you will see sensitive documents. You can review key documents and agreements with suppliers and customers to confirm that the numbers are as they have been represented to you in negotiations. In addition, you can study the company’s documents to learn whether they have any potential liabilities that could cost you money in the future. When you buy a business, you assume responsibility for all liabilities, as you are the successor in interest.
What you learn in due diligence could determine whether the deal will successfully close. If you discover unfavorable information, you could have the option of getting out of the deal. Alternatively, you could renegotiate the purchase price to reflect what you have learned.
Call a Miami Business Transactions Lawyer
If you are considering a business transaction, you need legal help to learn of the potential issue and to protect yourself. Contact a Miami business transactions lawyer at Daniel D. Diaz, PA, online or call us to speak with an experienced attorney.
