This article are provided for information purposes only, and are not intended as legal advice.


Buying a business – due diligence

November 12th, 2008

How fast do the largest customers pay?  Are they all 120 days? if so, why are they so long?  Does this mean that there are problems with the product sold or are they just slow paying customers?  Have they been given special payment terms?  You need to investigate this matter further.  Will you be acquiring the accounts receivable?  What happens if all the receivables are not collected, will this impact the purchase price?  If you are buying the assets of the company, do you need to do any special tax elections in order to write off the accounts receivable should they go bad after you acquired them.  You will need to contact your tax advisor prior to completing the purchase and sale agreement and determine what you need to file, if any, with the appropriate tax authorities.  Need special assistance, you can hire an accountant see www.landapc.ca

 

What is the relationship with suppliers.  Does the company/old owner get special terms?  Are these special terms transferrable?

 


Filed under: Buying a business — Gary Landa @ 9:20 am


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