Corporate & Commercial

Succession planning and business growth

One of the most crucial decisions in the life of a business is deciding whether the business will be passed on to family members or whether the business should be sold. Regardless of which option is pursued, a business requires a "warrant of fitness" to be a viable option.

This will require ensuring that business records are sufficient for the purposes of due diligence by a prospective purchaser, trustee or extended family. By anticipating the requirements of the due diligence process, the viability of a business as an attractive option for purchase or succession will be increased.

Due diligence

Due diligence is about ensuring that a decision to purchase a business is fully informed and that there will be no future unpleasant surprises. It enables the purchaser to rely on his or her own investigations, information gathered and judgment as to whether or not the business is a sound investment.

Warranties as to the state of the business are only as good as the person giving them. Undertaking appropriate due diligence processes will assist in precluding future liability of the vendor. Essentially, the due diligence process represents a checklist for the purchaser on acquisition of the business whether by way of succession or by sale.

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Enquiries and information

For more information about the Winegrowers' Legal Guide, please contact:

David McGregor
Partner, Auckland

Philip Gregan
NZ Winegrowers