How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask WiseOwl58 Your Own Question
WiseOwl58, Attorney
Category: Business Law
Satisfied Customers: 3675
Experience:  Experienced business lawyer.
Type Your Business Law Question Here...
WiseOwl58 is online now
A new question is answered every 9 seconds

Am bidding on a well-known online multi-million dollar company

Resolved Question:

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: 5 years ago.
Category: Business Law
Expert:  WiseOwl58 replied 5 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.
WiseOwl58 and 3 other Business Law Specialists are ready to help you