Papers to expect to get when buying a business

It depends whether balance sheets have been prepared.

You do need to know what assets and liabilities you are taking over.

Tax returns are personal to the taxpayers and I wouldn't expect to get them.

I would have thought you would want to see copy sales invoices, purchase invoices, bank statements, paying in books, cheque book stubs, etc. for the last couple of years.

Peter

Surely this depends upon how desperate they are to sell and how keen you are to buy?

If you are going to walk away without the info they would be silly not to let you see it

tim

It depends whether balance sheets have been prepared.

You do need to know what assets and liabilities you are taking over.

Tax returns are personal to the taxpayers and I wouldn't expect to get them.

I would have thought you would want to see copy sales invoices, purchase invoices, bank statements, paying in books, cheque book stubs, etc. for the last couple of years.

Peter

Thanks for the pointers Peter.

In message , Ken writes

Yes, make sure they are audited. It is reasonable for them to have been 'adjusted' to remove the owners own remuneration and their costs of finance.

You need a schedule of the assets that you are buying. A B/Sheet normally be forthcoming if you are just buying the goodwill of a business plus stock, fixtures & fittings etc., As you are not buying a Limited Company then a b/sheet wouldnt tell you much.

It is partnership dont forget, not a limited company. So long as the p&l account has been audited then their tax returns arent much use.

In message , PeterSaxton writes

It would be better to ask for audited accounts.

You're not going to get audited accounts for a partnership.

VAT Returns and make sure they agree to the last 6 years accounts, with a study of the trends in those accounts - would be important to me.

There is a word of caution to be sounded. My firm sold to a new buyer last year, and the new buyer's professionals wanted eg "proof that the rates had been paid in 1999". The vendor had no means of proving that, and after a month's delay - with no one looking after the business - was persuaded to drive half way across Africa to sign some sort of "solemn declaration" that "the rates had been paid in 1999".

During that month the company lost so many clients it effectively died.

You are if you are the buyer.

You are confusing the lack of a legal requirement for such an audit with the requirements of a purchaser. In those circs you can most certainly CAN get audited accounts if the vendor is serious.

Ha! I cam believe it. So called 'due diligence' by intermediary advisers in which their main purpose is to cover their own backsides often ends with exactly the opposite result to that intended by the primary parties.

Thanks for all the help and I a much more enlightened now.

Ken