It is strongly recommended that any purchaser of a business in the United States has a proper due diligence investigation into the business that they are buying. This would include an examination of at least three years tax returns, an extensive review of all source documents supporting the sales and profitability claims of the sellers, an analysis of staff employed and inspection of any legal documents.
Each due diligence investigation can be structured to suit each individual business as required. There have been a large number of situations where Britons have purchased businesses solely on the word of the sellers as regards the profitability of the operation, with disastrous consequences. Had a qualified accountant been employed to review the records these situations could have been avoided.
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