Thursday, November 13, 2008

Online Resource: The Ohio Practical Business Law Blog.

Welcome Ohio Practical Business Law Blog.

What can one do but admire a lawyer who manages to combine the Chicago Cubs and the business judgment rule into one post (Cubs Cursed by the "Business Judgment Rule"?)? Something there for Cub fans, lawyers, and business owners.

Likewise, I found Doing "Due Diligence" both useful and well-written. These paragraphs should be read by every businessman selling or buying a business:

Without "due diligence", a buyer may discover too late that the facilities require enormous capital expenditures to compensate for deferred maintenance. Perhaps the largest customer is very unhappy and in the process of moving its business to another company. The accounts receivable may be well past due and even uncollectible.

In larger transactions, "due diligence" can take months, be extremely costly and involve professionals of many kinds (including attorneys and CPAs). When smaller privately held companies are involved, the process is less complicated, but should not be ignored entirely. For a helpful rundown of what "due diligence" is all about and the process, visit this FAQ.

Every company being acquired and every industry is different so different things will be important in any particular "due diligence" process. However, for a nice overview of the sorts of tgenerally applicable things you should ask about when doing "due diligence", visit "What Does 'Due Diligence' Mean When Buying a Business?" There are also many many good due diligence checklists available on the web. Some of the most important things you should be interested in finding out should include:

  • Security Interests and liens on the assets being purchased
  • Unresolved pending or threatened litigation
  • Financial health of the company, including collectibility of accounts receivable
  • Identification of the key assets essential to the continued operation of ongoing business being purchased
  • Current employee benefits and policies
  • Quality of relationships with customers, vendors, and suppliers
  • Condition of equipment and facilities
  • Agreements among owners relevant to the purchase
  • Saleability of inventory

Yes, there are reasons for having a lawyer.