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WiseOwl58, Attorney
Category: Business Law
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Am bidding on a well-known online multi-million dollar company

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Am bidding on a well-known online multi-million dollar company with its primary base of operations in england, but can be done anywhere via flippa (I live in Chicago and will be moving to NYC in 2 weeks with also an address in LA). It's a very low price for the claimed worth (95k in cash flow monthly, but overhead seems a bit high at $7k). Have ordered a guide on buying an online business due diligence & have viewed all their financial documents via screen share, etc. Since it's flippa, they don't want to give me a period where a lawyer and accountant reviews the docs for me. I'm a former lawyer, but have no expertise in business. Have asked the broker several quest, but am aware they always favor the seller. Any general advice of what I can do outside of escrow to protect myself? Much thanks. Sorry so long.... Am so frightened of being scammed!
Submitted: 4 years ago.
Category: Business Law
Expert:  WiseOwl58 replied 4 years ago.
First, you and/or your accountants should audit the cash make sure.that the business is actually generating the cash that the sellers.claim Do this by auditing the financial statements against.the bank statements so that you can actually verify the cash flow exists. Then audit the expenses against actual refrigeration so that you are convinced the financial picture is adequate.

When you pay the purchase price you want to have a hold back of 20% for contingencies and any parts.of the purchase agreement like the representations and warranties that prove not to be true. You also want.the seller to indemnify you for any claims that arise for a period of 2-3 years after.the sale that are not disclosed to you in the purchase agreement

Finally, you should consider employment agreements.for key personnel that you keep and non compete agreements for the founders and other key managers and systems engineers.
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