Purchase and sale of business — Client questionnaire for Purchaser

Introductory note:
This checklist sets out a list of questions for a practitioner to ask a client prior to entering into a purchase and sale of business agreement. It is to assist in doing the due diligence required. This can be completed either with the practitioner and client (in person/on the phone) or by the client themselves. The client should be made aware that completion and accuracy of the checklist is very important in assisting the practitioner in being able to understand the breadth of the sale and purchase and all relevant issues. The practitioner then has a better understanding of the sale and purchase and is able to ensure all aspects of the sale and purchase are identified and dealt with. They can then either draft or review the relevant agreements to ensure that the agreements reflects the client’s interests.

How to use this checklist:
While it might appear cost-effective to the client to fill out the checklist in their own time, time may be saved by doing it in conjunction with the practitioner as any queries, ambiguities or other can be dealt with immediately. This is turn means either the drafting or reviewing of the agreement can be commenced expeditiously. It also allows the practitioner to determine the client’s appreciation of the commitment they are making and to ensure that they are aware of all aspects of the commitment.
Obviously, the level of understanding will depend on the actual client and so the practitioner can make a decision how to approach this checklist on that basis.
•	Please note cases have been lost when the identity of the purchaser or vendor has been incorrect.
•	Choice of the best entity to purchase a business is a decision with long term consequences so should be a very considered decision. The choice of the purchasing entity involves legal and taxation issues.
•	Be aware that while you may be dealing with an individual it could be a company or trust purchasing the business.

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