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MShore Law
MShore Law, Attorney
Category: Business Law
Satisfied Customers: 25285
Experience:  Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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Im looking at purchasing a website from a seller who is reluctant

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I'm looking at purchasing a website from a seller who is reluctant to have lawyers involved in the purchase agreement. This is a red flag for me, but I'm wondering, is it possible for the seller to have debt against the business that I am unaware of? What would be the best way to determine if there is any outstanding debt against the business?
Submitted: 1 year ago.
Category: Business Law
Expert:  MShore Law replied 1 year ago.
Thank you for the post, I am happy to assist you by answering your questions. Have you already had an accountant do an audit of the business?
Customer: replied 1 year ago.

No. I've had bank statements and website traffic data sheets sent to me, but that's it so far. Here is a record of our correspondance so far:


Simeon,
No offence to your concerns, but I really want to keep the sale a very simple procedure with absolutely no fuss, no complications, no lawyer & their languages involved (because I don't understand a word from them :) ).

I have attached a bigger picture of the traffic sheet to show that it is from the website. Also I have attached the website admin setting to show that the bank statements are from the same website. The regular payments on bank statements, of sale amount mentioned on the website clearly suggest that they are from the same website.

I can assure you that my upcoming project is no where associated to this business. It is totally different. But, if you insist then I have no problem signing up non-compete.

To help you alleviate your concerns, I can offer you a good payment plan. Don't pay me entire $279,000 at one go.

Pay a down payment of $120,000 initially and I'll transfer the business to you. Then, pay me the balance $159,000 from the proceeds of the income the website brings to you every month. Lets say pay me $30,000 every month from the income it generates for you for 5 months and I get my price from you. I don't need a lawyer to write up this payment plan for us. I trust people when I do business. So, your verbal assurance is enough for me if you agree to pay me for next 5 months in equal instalments of $30,000.

I can also facilitate the transfer of business to you even before you pay the down payment. It can work like this - I transfer the business to you FIRST then as soon as you get the business, you pay me $120,000. Then, as the website brings automated income for you every month of $80,000, you pay me $30,000 for next 5 months until my full price is paid. What do you say? But, you should have $120,000 immediate funds to start this transfer of business.

Pascal



On Sat, Mar 2, 2013 at 10:23 PM, Simeon Elibaccus <XXXXX@XXXXXX.XXX> wrote:



Thanks for the additional info Pascal.

Everything looks good. With the bank statements and the traffic data sheets, do you have a way to verify that they are from the website? I would like to proceed with our discussions and possibly get lawyers involved at this point if you are comfortable with it.

You mentioned that you are selling this business because you are working on something else that's bigger. Would you have a problem signing a non-complete clause for this business?

With regards XXXXX XXXXX please don't take this as an insult because I think I'd feel the same with any business I looked at, but I am quite concerned about falling for an internet scam. It's nothing against you personally but to do this business this will drain all of my finances, and I don't want to end up another statistic. Hopefully you can understand that. What I would like to propose is some sort of tiered payment process we can have the lawyers write up where I deposit some money(a downpayment) in trust to the lawyers. Then the first few months of sales go in trust to the lawyers as well before we both get our payments out of it at the agreed times and rates.

Let me know if something along those lines would be aceptable to you or if you have another idea to make it work that would help alleviate my concerns.

Thanks

Simeon



From: Pascal Inc <XXXXX@XXXXXX.XXX> To: Simeon Elibaccus <XXXXX@XXXXXX.XXX> Sent: Thursday, February 28, 2013 10:03:20 PM Subject: Re: $90,000 Income per month business - Bizbuysell




Simeon,
Thanks for your further interest in discussing this business.

Your answers are as follows:

1. New ownership doesn't affect the outsourced masters to work on this business. The blueprint to run this business through these contacts would definitely be given after sale.

2. Yes, sales figures prior to six months are attached.

3. Competition doesn't affect such business. There's enough money in the pool. You just need to dive in.

4. As stated in my previous mail, customers come from ppc advertising. This is also mentioned in the listing.

5. Traffic report is attached for last 3 months.

6. 3-4 sales are my monthly target to achieve my income goals. Percentage goes up and down depending upon holidays, peak market season, etc.

7. With billions of websites looking for this service today, business comes primarily from new customers.

8. Client information is never stored, unless they wish to create an account which is stored on secured hosting servers.

9. The website theme supports many in-built payment systems like Paypal, Alertpay, Money booker, echeck, wire transfer, Google checkout, 2Co, etc. You can choose any one as your preferred payment receiving system from customers.

10. Hostgator hosts this website. I do not own the server. Hostgator is a third party hosting service preferred and trusted by millions across the world.

Thanks.

Pascal



On Fri, Mar 1, 2013 at 8:41 AM, Simeon Elibaccus <XXXXX@XXXXXX.XXX> wrote:



Hi Pascal

Thanks for the quick response. I'm definitely interested in continuing the conversation. Obviously I'd like to do my due dilligence to protect my financial future. Could we also discuss the following:

1. You mention outsorcing most of the work. On your website it refers to "ex-googler's". Are these people willing to stay on board with new ownership?

2. do you have sales figures from prior to the last six months?

3. What is the competition like?

4. I googled "How do I get to the top of google", and "google presence websites". Your site didn't show up. As a consumer, how do I find the site?

5. How many unique visitors do you get to the website every month and how do you track it?

6. Of the visitors to the website, what percentage do you make a sale from? Has the percentage been going up or down?

7. What percentage of repeat business do you get?

8. How is your client information stored and secured?

9. How are the payments processed?

10. Who hosts your website? Do you own your own server?

Looking forward to your response.

Simeon



From: Pascal Inc <XXXXX@XXXXXX.XXX> To: XXXXX@XXXXXX.XXX Sent: Thursday, February 28, 2013 5:29:54 PM Subject: $90,000 Income per month business - Bizbuysell





Hi,

Thanks for your interest and seeking additional information for my web business http://top10gooogle.com/ listing for sale on Bizbuysell http://www.bizbuysell.com/listings/Profile/?q=681403.

This internet business is a child's play for anyone and is as easy as 1-2-3.Everything is set up. You just need to follow the footprints, as suggested by me, and the money flows to your bank account easily. The money gets directly deposited to your account from customers after each sale. Please look at my bank statements attached herewith, to see how easy it is to earn with such internet business.

Let me give you a picture of how this business works.

1. First I do ppc advertising to attract highly targeted customers. People who show interest to get ranked or improve their rankings by buying backlinks package on my site. This is completely outsourced to experts to manage the advertising. Info will be shared with the buyer of this website after the purchase.

2. I reply to customers (leads generated through advertising) giving them a quote ranging anywhere between $5000 to $10000 (as shown in my income proof attached). Pricing is per keyword basis. Remember there are billions of websites now and this is a very flourishing business. You never run out of buyers of this service.

3. They accept the quote, then I get paid first then I outsource this link building work to third-parties again (pretty cheap resources). Again this resource will be shared with the actual buyer of this website after the purchase.

4. Finally, the link building report they send me, I simply forward them to the customer. The service is provided and I get to keep a huge profit margin after all expenses.

No manual work. Everything set up and outsourced to others. Just checking emails daily for half an hour is what you gotta do.

Simple business! High Profits!!

Let me know if you're interested to buy.

Thanks.

Pascal





















Expert:  MShore Law replied 1 year ago.
you need to had an account due a valuation of the business to determine it net worth based on generally accepted accounting principles. This is the only way for you to determine the true value of the business, you may very well be overpaying. If you do not want to incolve an accountant either, you should ask for a copy of all financial records for the business, including its three year back tax statements. Please let me know if this does not answer your questions or if you need additional guidance. If I have answered your questions, please positively rate my answers.
Customer: replied 1 year ago.

By getting the tax statements will that prove that there aren't any outstanding loans?

Expert:  MShore Law replied 1 year ago.
It will prove that if there are outstanding debts, they were never reported which is unlikely as a business would generally want to claim the interest on the loans as a write off. But again, the best way would be to have an accountant audit the business. If the seller opposes this as well, you really should think long and hard about buying the business.
MShore Law, Attorney
Category: Business Law
Satisfied Customers: 25285
Experience: Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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