Buying a business: prepare your legal due-diligence brief

01 / Practical step

Describe the proposed purchase precisely

Record whether the proposal is described as an asset purchase, share purchase or something you do not yet understand. List the trading name, seller named in the paperwork, business location and any proposed signing or completion date. Mark these as information supplied by the seller rather than independently verified facts. Ask the adviser to confirm the transaction structure and identify what falls outside its review. The structure can affect which documents the adviser needs; avoid commissioning a narrow review before explaining the wider proposal.

02 / Practical step

Create a transfer inventory

Group the things the business relies on: premises, equipment, stock, customer arrangements, supplier contracts, licences, intellectual property and employees. Beside each item, record the document you have and what remains unknown. For a lease, include amendments and correspondence about transfer if supplied. For equipment, distinguish what the seller says is owned from what is leased. This inventory helps the lawyer identify further enquiries; it does not establish that a particular asset, permission or relationship will pass to you.

03 / Practical step

Compare the legal outputs

One quote might cover reading a sale agreement; another might include enquiries, negotiation and completion. Request a stage-by-stage proposal and ask who coordinates third-party approvals. Find out whether employment, tax, finance and licensing questions require separate advisers. Put the intended deliverable next to each fee: issues list, revised agreement, negotiation or completion support. A broad phrase such as “due diligence included” needs an explanation of the material reviewed, assumptions used and limits of the work.

04 / Practical step

Illustrative example: the café with a short lease

A buyer is offered a café’s equipment and trading name, while its premises are occupied under a separate lease. The useful question is not simply whether the sale contract looks normal. The buyer asks the lawyer to explain how occupancy, the sale and any required consent fit together, and asks the accountant to assess the financial proposal separately. This is an invented preparation example, not a conclusion that the purchase should proceed or that a landlord will consent.

05 / Practical step

Leave the consultation with an enquiry list

Ask which missing documents could materially change the assessment, who will obtain them and when the adviser can review the response. Keep open questions separate from matters already answered. Before instructing the next stage, confirm how extra document review or negotiation changes the cost. If the seller is pressing for a signature, show the exact communication to the adviser and request advice about that decision; a general online checklist cannot assess the consequences of signing.

• Proposed sale agreement and all supplied schedules
• Lease, variations and any transfer correspondence
• Inventory of contracts, assets and permissions mentioned by the seller
• A list of financial questions reserved for the accountant

06 / Practical step

Set the boundary between legal and commercial approval

Ask how the lawyer will report unresolved enquiries and which matters remain for you or another adviser to evaluate. Keep the commercial decision separate from the fact that a document has been reviewed. If the transaction changes after the review—different assets, a revised lease or another seller—tell the office and ask whether its advice needs updating. Your final checklist should identify open dependencies rather than imply that every risk has been cleared.