A party considering buying a business in Florida should prepare for due diligence. This applies equally to those who invest in a company and to those who buy an entire company or just the assets of the company. Some important considerations in this due diligence are where to start, to what extent a seller’s representations can be trusted, and what to document in the transaction.

Buyers should recognize that Florida law generally regards those involved in a business enterprise as sophisticated business persons. Therefore, any party that engages in a Florida business must perform some level of due diligence. The level and amount of due diligence is very specific to each transaction. Involving the expertise of commercial lawyers, valuation experts, financial advisers, and trade brokers will help in this endeavor and focus on due diligence.

A good place to start this due diligence is to request to examine the books and records that Florida law requires companies to keep. These records and corporate incorporation documents can illuminate the way the business has been operated. They can also help verify the seller’s representations.

Under Florida law, parties who buy a business can rely on certain representations from a seller. However, whether that reliance is justified and to what extent the statements affected the buyer’s obligation to verify the information are considerations that the Court reviews when awarding allegations of misrepresentation. Therefore, relying completely on a seller’s statements without verification is often reckless and can even undermine otherwise valid claims of misrepresentation. Therefore, a better way to approach due diligence is to independently verify important representations.

Keeping clear records is also an important part of due diligence. Some key facts to record in the transaction are, of course, the seller’s statements that significantly impact the buyer’s decisions. It is also equally important to document the scope of the transaction and precisely what property or assets are covered by it. In doing so, the parties will have a comprehensive understanding of the scope of the transfer.

The starting point for any buyer should be to hire a qualified business advisor. The Florida Bar Association recognizes attorneys who are experts in commercial litigation with Board certification. To earn this recognition, attorneys must undergo a number of jury and non-jury trials, pass a comprehensive examination, and receive satisfactory reviews from their peers and judges before whom they have practiced. A complete list of Board Certified Attorneys in Commercial Litigation Law and other areas is available on the Florida Bar website at http://www.flabar.org.

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