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gar1976 · 07-05-2004, 08:42 AM

I can't believe I spaced on this one, huge point -

If you're buying an existing business, try to buy only the assets and assume any leases. Leave the liabilities and the stock to the current owners, and adjust the difference through the purchase price.

Reason being - if you buy the stock/equity of a business, you also assume any liabilities, be it stated or not. Which means you're on the hook for anything the previous owners did but did not disclose. You might be able to come back and sue them, but that's a large risk to take.

07-05-2004, 08:42 AM	#9 (permalink)
gar1976 Custom User Title Location: Lurking. Under the desk.	I can't believe I spaced on this one, huge point - If you're buying an existing business, try to buy only the assets and assume any leases. Leave the liabilities and the stock to the current owners, and adjust the difference through the purchase price. Reason being - if you buy the stock/equity of a business, you also assume any liabilities, be it stated or not. Which means you're on the hook for anything the previous owners did but did not disclose. You might be able to come back and sue them, but that's a large risk to take.