Business Acquisition Tip: Why Warranties Aren’t Enough
Buying a business through a share purchase might seem simple — but it can carry big hidden risks.
As Ross Millen says, when you buy a company, you get it warts and all — and those warts can bite back years later.
In this quick video, Ross explains:
🔍 Why warranties alone won’t protect you
📋 The critical due diligence items buyers overlook
💥 Risks like employee claims and undisclosed liabilities
✅ How to structure your deal to stay protected
And if you're serious about doing it right, ask us for our due diligence checklist. We’ll help you cover every angle.
Because what you don’t know can cost you.
VIDEO TRANSCRIPT
Ross Millen:
Hi. As we've now entered the new financial year, maybe you are thinking about what's your next step in your business development, and sometimes this can be buying another business or whether you're buying a business or buying a company. And what I wanted to talk to you about today is some of the things to look out for when buying a business. Now, obviously when you're buying a business, you have like a sale and purchase of business agreement, and some of the important things in that is to make sure you've identified all of the assets that you're going to buy. Now, basically the main thing is to make sure that all the assets of the business are transferred across, whether it's land leases, licenses, plant and equipment, employees, transferring employees to make sure all of these things come across to you, which you can own in your own existing or perhaps a new entity that you've set up.
So it's our job as your lawyers to make sure we identify all the assets and we go through the process of making sure they're all transferred across. So sometimes you have to watch out for extra duty payable if you're transferring land and plant and equipment together as one transaction. Sometimes you might want the land in one company and then lease it to your operational business. So these are some of the structuring things we can advise you about as well. And with employees, remember any transferring employees, you'll be taking on their accrued liability. So there's got to be an adjustment for that. And sometimes you might want all the employees, so you'll have to have a discussion with the seller about who's responsible for paying any redundancies and things like that. So if it all seems a bit daunting, don't worry. We've got a great checklist. We can help you. If you're thinking of buying a business in this new financial year, remember to contact me, Ross Millen at Millen's. I'm here to help.
