Common Procedural Mistakes Lawyers Make in Business Purchase Transactions
Author: David Jennings


David Jennings lists 13 errors that are commonly made by lawyers acting in business purchase transactions.

  1. assuming business risk on opinions;
  1. accepting the client’s initial assessment of whether to make the transaction a share purchase, asset purchase or arrangement;
  1. assuming in a share transaction that the assets don’t need to be examined and described in detail;
  1. forgetting to obtain tax advice;
  1. assuming the standard Intellectual Property and Environmental representations are always appropriate regardless of the business;
  1. forgetting to get up-to-date financial statements and capitalization tables;
  1. thinking a client can be compensated for a misrepresentation by a company that the client now owns;
  1. thinking that all the vendors have the same interests;
  1. relying on non-competition agreements and non-solicitation agreements to protect rights;
  1. ignoring the residency of the Vendors and Purchaser;
  1. assuming due diligence can wait;
  1. forgetting which assets you want/need and confirming they are being transferred; and
  1. neglecting to check material contracts and the constating documents to ensure the transaction is permitted.

Learn more:

This list of common mistakes to avoid  was prepared for the Buying and Selling a Businesssession of a three-session series following the course Business Basics 2009, held in September 2009. The courses are all available online as part of CLEBC’s webcast archive.

 

 

 

 

 

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