Please see our Commercial services below:
Embarking on a new business or buying a share of an existing business is a significant step for a client. We encourage clients to talk to us and their accountants first before any contractual documents are signed to ensure their interests are protected and appropriate structures are put in place. Often a business purchase may involve forming a company, leasing premises, borrowing money from the bank, giving personal guarantees and other security, formulating terms of business, and preparing employment agreements.
Each business is different and unique and any contract should be carefully considered to make sure that what is expected to happen will happen and the rights and obligations of both the seller and buyer are clearly understood. A business may be structured as a company and so it is shares in that company which are bought and sold, or it may be the assets and goodwill of the business itself which are bought and sold.
Many businesses lease their premises and the Canterbury earthquakes have altered our approach to lease documentation, depending upon whether the premises have been damaged and require repair, or have been built since the earthquakes. The earthquakes highlighted issues such as lack of access where areas of the city had been cordoned off or where premises need to be vacated so that repairs can be carried out. The standard lease documentation commonly used may require amendment to deal with these possibilities and the consequences to building owners and /or business occupiers.
From time to time, business operators may require finance to acquire a business or to provide working capital or for some other purpose. Banks and lending institutions require security for such lending, for example general security agreements over the assets of the business, personal guarantees or mortgage securities. The business owner’s lawyer will be instructed by the lending institution to act in its interest and to carry out certain searches and checks, and to ensure the lending and security documents are properly authorised, signed and where necessary, registered.