Due diligence needed to buy business | FLORIDA TODAY

QUESTION:
I am considering buying a business, and someone suggested I complete a “due diligence” study. What is a due diligence study?

ANSWER: 
Due diligence simply means reviewing documents and gathering information you need to ensure there will be no problems before, during or after the sale.

This involves examining the legal and financial issues involved in the transaction.

From a legal perspective, there are two basic methods used to acquire a business: an “asset purchase” or “stock purchase.”

In an asset purchase, you are simply buying specified assets of the business, i.e. equipment; intellectual property (business name, website, trademarks) accounts receivable and other types of assets.

With an asset purchase, you must establish a new business entity to start doing business as you are only acquiring the assets and not the entity."

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For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at info@buysellflbiz.com or 239.738.6227. Also, visit our Florida Business Exchange website at www.fbxbrokers.com and my personal website at www.buysellflbiz.com.