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Buyers Checklist

A checklist for new buyers

The following are some elements of a business deal that Aldes has identified that needs attention from a potential buyer.

1. Signed agreement

Make sure that you have a copy of the signed agreement. Your Sales Agreement will set forth all your obligations.

2. Lease agreement

“No Lease – No Business” This is certainly the most important aspect of any business transaction. Nowadays most landlords will also require that the tenant be a juristic person (a CC, Pty Ltd) for reason of the National Consumer Protection Act. When negotiating with landlords you are not on equal footing and would need to attend to their every requirement.

3. Other licenses

Many businesses require a license to operate. For instance you will not be able to trade a bottle store without a liquor license. Make sure that the previous owner’s license is up to date and/or transferable. It is also a good idea to make use of the consultant that assisted the previous owner in obtaining his license.

4. Bank account

No business can trade without a bank account. Again make sure that the account holder is the same as your trading name. Many customers make use of credit and debit cards and it is crucial that you ensure that credit card machine is linked to your bank account or that a new machine is installed on or before effective date.

5. Ownership structure

Whether you trade as a Close Corporation/Company/Partnership/Sole Proprietor it is important to acknowledge that most landlords, bankers and financiers will also require personal suretyship. With the event of the Consumer Protection Act and the new Companies Act there might be a natural migration towards ownership of businesses through a company.

6. Telephone lines

Depending on the need of the business this can be a crucial element. Some businesses generate most of their enquiries and sales through phone calls. Make sure that if the phone number is important that this is transferred before hand over.

7. Staff

The Labour Relations Act stipulates that a new owner of a business will take over the staff of the business as if there was no interruption. It is very important that you introduce yourself in such a manner that there are no staff interruptions after takeover.

8. Deposits

No seller will handle over his business without a deposit. Make sure that there are no hiccups with paying the deposit on time.

9. Cash flow

Within the first month, whilst busy with the takeover, it is normal for the business to have a small tip in turnover. You need to plan your cash flow correctly so as not to run into a short fall within the first month. Also remember that a landlord will require 2 – 3 months rental deposit.

10. Utilities

This can be organized with the management of the centre or mall wherein the business is located. The norm is that electricity and water are billed a month or two in arrears.

11. VAT registration

This is very important. If your transaction is for buying the business as a going concern and you are not registered as a VAT vendor, SARS will levy 14% VAT on the purchase price and you will end up with the bill.

Most buyers will use their accountants to finalise VAT registration, but the following can be used as a guideline of what is needed to complete your VAT registration:

  1. Purchase Agreement;
  2. Lease Agreement for the business;
  3. Proof of your bank account;
  4. Proof of CIPRO registration – if trading in CC or Pty/Ltd.
  5. Copy of your ID – as member of CC or Pty/Ltd.
  6. Existing VAT registration number;
  7. SARS might also request a copy of the financials of the business.

In spite of perceptions, we found that SARS is very helpful and their website www.sars.gov.za is very user friendly.

12. Advertise the sale – Insolvency Act

This is for your protection.

Not advertising the sale in terms of the Insolvency Act does not make the transaction null or void. It merely gives current creditors the right to also claim against you as the new owner, should there be any claims that the previous owner did not settle.

Most newspapers will also assist with this advertising and forwarding the detail to the Government Gazette.

13. Stock take

There is only one method of stock take: “close the doors and count the stock”. If you do not opt to physically count the stock, make sure there is some form of retention for problems that may arise from incorrect stock sheets later on.

14. Equipment

You need to check all the equipment, especially electronics, to make sure that they are in a working order. The best way to do this is to hand a letter to the seller whereby you confirm that all equipment is in a working order.

15. Insurance

Arrange in advance that your insurance cover on the equipment and stock will be effective from takeover date. It will be a good idea to review the whole insurance policy.

16. Ask the broker

Each business is unique in every way and your professional broker will be able to point out certain aspects of the business that will need your attention before takeover date.

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What our clients say about us

Excellent service and advice from Anna-Marie received. Credible and honest. She walked together all the way to the end and quickly resolved all conflicts with the buyer.
I was so impressed by the friendly and professional service we received in selling our business - there is no way that we could have done this alone without Rudi White. Many thanks to you, Rudi, for being instrumental in the efficient and speedy success we had within a few short months
Hi Wynand. Myself and Zakia really appreciate everything that you have done for us during the last couple of weeks in making this sale possible. We are forever grateful and thankful for all that you have done and we look forward to continuing with this friendship that we have built.
BUSINESS SOLD! It has been quite the journey to sell our small online business, but to do it with Wynand and the Aldes team by our side, the process was seamless.

It was the second time that I had worked with Wynand and the ...
Thank you so much for everything you have done over the last few months. You have made the whole process so easy, understandable and effortless (for us). We only now realise just how much you have been running around, working at all hours and everything else that you have done to make sure we found a buyer and concluded a sale. When we first met, Frank and I immediately knew that you were our guy; and you have ceaseless...
Baie dankie vir jou!! Jy het baie ure hier ingesit en ek waardeer dit vreeslik baie.

Dankie vir die wonderlike Koper wat jy gebring het, ons het gemoedsrus in die feit dat Jaco heeltemal bekwaam is vir hierdie posisie. Ek is dankbaar dat jy en Jaco oor ons lewenspad gekom het.

Dankie vir jou mooi wense, ons is beslis opgewonde oor die nuwe hoofstuk van ons lewe en sien vreeslik uit daarna.

Weet dat jy altyd meer a...
From my first contact with Wynand, he struck me as very professional and his knowledge about the business that I was inquiring about was astonishing. He explained the process extremely well to all parties which made the whole ...
Hey Nic

I just wanted to say thank you so much for all your assistance in selling our business.

We are so grateful for the time you have taken and eternally grateful that you found us a buyer.

Take care and stay safe
...

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