Buying a business: a practical first checklist

Set your buying brief

Write down the location, sector, investment available and role you want after completion. Separate the purchase price from the money needed for fees, working capital and unexpected costs. A business with attractive reported profit can still demand substantial cash and daily management.

Check the identity and authority

Identify the legal entity, the person representing it and what is being sold. Companies House provides public company records including officers, filings and charges. Use those records as one input to your checks, then reconcile the information with current documents and the seller’s authority.

• Check the company number and current ownership.
• Ask who can authorise the transaction.
• Confirm whether the proposal is an asset sale or share sale.

Ask for evidence in stages

Start with a non-confidential financial summary and a clear reason for sale. After agreed confidentiality arrangements, ask for accounts, management figures, cash records, customer concentration, lease terms and material contracts. Give your accountant the figures and your solicitor the legal documents.

Make an offer with conditions

Identify assumptions about cash, debt, working capital, assets and handover support. Outline diligence, funding and required consents. Ask advisers to distinguish binding provisions from indicative commercial terms. Do not pay a deposit or sign a guarantee simply because a deadline appears in a listing.