Buy-in management buyout (BIMBO) This combines outside and inside management in the purchase of a company. The risk of buying into a company from the outside can be reduced if the existing management of the company is also involved. Assets for sale In buying an existing business, whoever the seller or buyer, it is important to recognize what exactly is for sale. This will depend not only on the wishes of the parties to the negotiation but also on the legal status of the business. Sole traders and partnerships have no legal existence separate from their owners therefore only the assets of such businesses can be sold. Limited companies, on the other hand, are separate legal bodies they have an existence distinct from their owners. Once a limited company has been given birth (formed, it can change parents shares can be bought and sold. However, in order to avoid inheriting unwanted or unknown liabilities, it is also common for only the assets of limited companies to be acquired. Tangible assets a) Freehold property If location is an important element in the marketing strategy of a small enterprise, then it is sensible to gain security of tenure over the property by buying the freehold or at least securing along lease with first option to renew. Property owned by a small firm improves its balance sheet if such property changes hands the property is the most valuable asset. b) Debtors Those people or companies who still owe money to a business for sale, on account of goods received or services rendered represent areal asset in the books of any business. The problem is whether they will pay and when. This uncertainty in payment is overcome by the seller retaining ownership of the debtors and collecting the money themselves.
