When you are buying a business you are buying some assets used in that business. More important are the previous owner"s skills and contacts. It is that existing client list that makes the deal worth something; otherwise you might as well start up a new business.

Before you even start looking, talk to your (an) accountant We will talk to you about the financial controls and marketing requirements you will need to understand. Also understanding those things means you know what to look for in the businesses you look at.

Selling a business

Like selling your home, you need professional advice when selling your business. What is its value, what do you do about debtors and creditors, how do you deal with your staff, what tax and GST payments will you have to make. These and many more issues are involved that will be expensive if you get them wrong.

If you are being asked to leave money in the business to help the new owner what is their credit rating and business experience. Are they going to be able to pay you when the time comes?

Remember that any guarantees you give can carry on after the sale unless you have had them cancelled. If the lease is in your name or guaranteed by you then you remain liable for the payments if the new owner (and it can be several owners later some times) goes broke during the remaining term of the lease.

Leasing a business

As the tenant.

Like when buying a property, leasing one can be very expensive if you get it wrong. The cost of the lease is not just the rent. What are the other outgoings you will be responsible for? You have the right to negotiate on any rent changes during the lease. You do not have that right as far as insurance, rates, ground rent and many other expenses are concerned.

What also are the costs the tenant is responsible for on maintenance of the buildings and grounds? The small print can get very expensive!

Usually you will sign an agreement to lease. Like buying a property that is only the first stage agreement that you are going to do something. The arrangement is completed when you sign the full lease. Make sure it is clear what the form of the full lease will be. Get a copy of it so you and we can check what else you as the tenant will be responsible for.

As the landlord.

Who is the person who you are going to depend on to pay the rent and other bills? What is their credit rating and reliability as a tenant like?

You must check these things out before signing any agreement with them. Once signed you are committed to letting them in no matter what you might later find out about them or their business.

Talk to us first before you sign anything.

Inevitably you will have to guarantee the lease if it is in your company or trust's name.

Member of the Property Law section of the New Zealand Law Society

Member of the Family Law section of the New Zealand Law Society