Legal fees when buying a business

We are often asked to give a quote for the buying and selling of a business, sometimes its an Internet business, often its a more traditional business. Firstly it will come as no surprise to know that it can be very expensive. So do shop around. We can offer fixed fees but these fees do have a habit of fast becoming fluid. This is largely due to the nature of the transaction and the approach taken by the parties. Here is a common example.

You agree a fixed fee for your sale of your business. Your affairs are all in order ( or so you think) you do not envisage any problems. Unfortunatley the buyer will look at it differently. If you are unable to produce contract x or policy y, if your accounts are weak or there are holes in your loan accounts then this will inevitable lead to the buyer seeking to reduce the price. This will lead to delays and stress and possibly heartache. So do try and get your house in order as soon as you can. The Due Diligence is crucial and can be very painful. What you think the sale price is and what is agreed in the Heads of Terms may well be different in three months time. So this is why a fixed fee is often difficult to pin down. We do offer fixed fees but very rarely do they come in at the fixed fee. Its akin to a builder. He gives you a fixed fee and you pay a deposit. Unfortunately you find out when he is digging, problems with the foundations, the fixed fee then goes out of the window. Our advice is to agree a fixed fee. However build in a ceiling that fees will not exceed xx that way this gives you some protection in the event that problems do arise.

Izaz Ali is a Solicitor Advocate, Director and chap responsible for the sale and purchases of many ecommerce businesses. He can be contacted at izaz.ali@lawdit.co.uk.

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