# Help: we're buying a company in 12 hours .... **URL:** \ **Category:** In My Humble Opinion\ **Created:** [February 17, 2014, 12:26am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506 "2014-02-17T00:26:22Z")\ **Posts on this page:** 13\ **Page:** 1
**Author:** ![BrokenBriton](https://avatars.discourse-cdn.com/v4/letter/b/4bbf92/32.png) [@BrokenBriton](https://boards.straightdope.com/u/BrokenBriton)\ **Post date:** [February 17, 2014, 12:26am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/1 "2014-02-17T00:26:22Z")
… I should mention it’s in the UK. It’ s no big deal I suppose but we want a license the company holds because it will save a lot of time and some money. We’re looking to do the deal tomorrow (it’s at a good price), check everything out over the next couple of days and do the paperwork asap after that … As best I know, we go see a lawyer or accountant, the existing shareholders/directors sell their shares to us, and we become the shareholders/directors? In addition, the Internet says we need to check out … The company’s existing credit arrangements (on going) The company’s liabilities/debts (outstanding) Any pending litigation affecting the company? Is the company tied to premises (a lease, perhaps) License: Impact for new owners of poor compliance? Is the VAT account in good shape? I guess I’m just looking for confirmation we are on the right track. ---
**Author:** ![the\_diego](https://avatars.discourse-cdn.com/v4/letter/t/7bcc69/32.png) [@the\_diego](https://boards.straightdope.com/u/the_diego)\ **Post date:** [February 17, 2014, 12:36am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/2 "2014-02-17T00:36:36Z")
Isn’t there a law on performing due diligence before a purchase? ---
**Author:** ![ALOHA\_HATER](https://avatars.discourse-cdn.com/v4/letter/a/76d3ee/32.png) [@ALOHA\_HATER](https://boards.straightdope.com/u/ALOHA_HATER)\ **Post date:** [February 17, 2014, 12:52am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/3 "2014-02-17T00:52:42Z")
For the love of God, please don’t buy the company. ---
**Author:** ![dougrb](https://avatars.discourse-cdn.com/v4/letter/d/76d3ee/32.png) [@dougrb](https://boards.straightdope.com/u/dougrb)\ **Post date:** [February 17, 2014, 1:03am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/4 "2014-02-17T01:03:39Z")
> [@the\_diego](#): > > Isn’t there a law on performing due diligence before a purchase? How is it NOT due diligence asking on an internet forum first:smack: ---
**Author:** ![UDS](https://avatars.discourse-cdn.com/v4/letter/u/ecae2f/32.png) [@UDS](https://boards.straightdope.com/u/UDS)\ **Post date:** [February 17, 2014, 1:44am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/5 "2014-02-17T01:44:01Z")
You see lawyers and accountants _first_. Not “first” as in before you complete the purchase, but “first” as in before you agree to buy. You will not be completing the purchase within twelve hours of instructing lawyers and accountants. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [February 17, 2014, 1:48am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/6 "2014-02-17T01:48:03Z")
How do you even know it’s a good price? How do you even not know any of this shit and yet have the resources to purchase any sort of company? ---
**Author:** ![the\_diego](https://avatars.discourse-cdn.com/v4/letter/t/7bcc69/32.png) [@the\_diego](https://boards.straightdope.com/u/the_diego)\ **Post date:** [February 17, 2014, 1:54am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/7 "2014-02-17T01:54:09Z")
> [@dougrb](#): > > How is it NOT due diligence asking on an internet forum first:smack: It has nothing to do with asking forumers to do your homework for you. I’m talking about prevailing laws and maybe SEC regulations that stipulate the minimum amount of audit and valuation work to be done, and the minimum amount of time spent. ---
**Author:** ![Crafter\_Man](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/crafter_man/32/458_2.png) [@Crafter\_Man](https://boards.straightdope.com/u/Crafter_Man)\ **Post date:** [February 17, 2014, 2:10am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/8 "2014-02-17T02:10:37Z")
> [@BrokenBriton](#): > > it’s at a good price Um, what kind of business is it, and what is the price? Keep in mind that many companies that are for sale are essentially worthless. The only value they might have is in the inventory. Many a buyers have been suckered into paying an exorbitant price for the “name” and reputation of the company, along with the customer list. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [February 17, 2014, 2:19am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/9 "2014-02-17T02:19:02Z")
> [@the\_diego](#): > > It has nothing to do with asking forumers to do your homework for you. I’m talking about prevailing laws and maybe SEC regulations The company is in the UK. ---
**Author:** ![the\_diego](https://avatars.discourse-cdn.com/v4/letter/t/7bcc69/32.png) [@the\_diego](https://boards.straightdope.com/u/the_diego)\ **Post date:** [February 17, 2014, 2:21am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/10 "2014-02-17T02:21:35Z")
They don’t have an SEC or a reasonable counterpart? :smack: ---
**Author:** ![UDS](https://avatars.discourse-cdn.com/v4/letter/u/ecae2f/32.png) [@UDS](https://boards.straightdope.com/u/UDS)\ **Post date:** [February 17, 2014, 2:39am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/11 "2014-02-17T02:39:55Z")
> [@the\_diego](#): > > They don’t have an SEC or a reasonable counterpart? :smack: Of course they do - the Financial Services Authority. But bodies like the FSA and the SEC aren’t that interested in regulating private sales of private companies. Their main focus is on financial products offered _to the public_, and on the doings of _publicly-listed companies_. Nothing in the OP suggest that either the purchaser or the target is a listed company, and clearly the OP does not envisage any offering to the public. So it’s very unlikely that FSA regulations require the OP to conduct due diligence. As far as the FSA is concerned, if he wants to buy a product sight unseen, there is no public interest which requires him to be stopped from doing so. ---
**Author:** ![Colibri](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/colibri/32/1841_2.png) [@Colibri](https://boards.straightdope.com/u/Colibri)\ **Post date:** [February 17, 2014, 2:42am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/12 "2014-02-17T02:42:05Z")
Advice is best suited to IMHO. Colibri General Questions Moderator ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [February 17, 2014, 3:45am UTC](https://boards.straightdope.com/t/help-were-buying-a-company-in-12-hours/681506/13 "2014-02-17T03:45:17Z")
Okay, let’s get to the absolutely first question that has to be answered before anything else. How do you know, and I mean really, really KNOW that this company actually owns the license you want? How do you know that someone isn’t going to come along and claim they actually hold the license and all the time and money you think you’ll save will be lost in round after round of litigation?