How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask JGM Your Own Question
JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 12198
Experience:  30 years as a practising solicitor.
31090051
Type Your Law Question Here...
JGM is online now

Hi, Can you provide small business legal advice with regards ***** ***** following: I purc

This answer was rated:
★ ★ ★ ★ ★

Hi, Can you provide small business legal advice with regards ***** ***** following:
I purchased an ongoing online 'Website' business which has existing customers that required goods fulfilling. I incorporated a new UK LTD company and acquired the 'Website' within that company. As part of the transaction the 'website' had some ongoing trade to fulfill goods with existing customers.
As part of the contract with the Seller of the 'Website' they agreed they would take care of the fulfillment of sales to these customers based on money the customer had already given to the Seller.
It now appears that for some reason the Seller cannot fulfill the goods and has a cashflow problem in both providing a refund and/or fulfilling the goods.
Do I, as new trading company, having purchased the website, have any liability to the customers. Or can I provide them with previous ownership details and wipe my hands (of course providing them with help and any information I can). Regards Andy
JGM
Thank you for your question.
If you bought the business as a going concern as opposed to the assets of the business then you are responsible for outstanding contracts. You have to be quite clear what your company bought. If you just bought the website that is one issue but if you bought the business then you are bound to fulfil the obligations as a going concern. Can you clarify exactly what it is that you bought?
Ask Your Own Law Question
Customer: replied 3 years ago.

Hi, Yes we purchased a website which contains the brand, it's social media sites (facebook, twitter), it's IP, it's users, databases - assets together with all accrued benefits from a going concern business (ltd company). We first setup our on Ltd. company and with the company setup made the purchase. The contract that both parties and individuals signed was 'sale of website business' and under one of the key clauses 'Liabilties' it states : (1) the seller agrees to remain solely responsible for all the debts and liabilities incurred in relation to the business and outstanding up to the completion date (save otherwise expressly provided in this agreement) (2) The seller shall be responsible for and shall indemnify the buyer against any and all debts and payments associated with financial transactions completed prior to the completion date. Hope that helps. Regards Andy
You are liable to the world at large but have a right of relief against the previous owners on the basis that you bought the business as a going concern.
Ask Your Own Law Question
Customer: replied 3 years ago.

Can you explain or point me to an explanation that clarifies what this means. i.e. world at large = does that mean said customers and 'right of relief' = what does this mean.

Thank you in advance Andy
Have you bought the assets of the business or have you bought the bus less itself?
For example if there were any ongoing contracts at the time of purchase did you take them over?
Ask Your Own Law Question
Customer: replied 3 years ago.

The website is a third party ticket exchange. The only assets we bought are the site itself. The assets in this case are tickets which the previous owner recieved money for. However the tickets have not yet been fulfilled. However the seller has received the money from the customers prior to the site purchase with the intention of fulfilling the tickets after completion.

Email the written agreement to me please. For confidentiality send to***@******.*** and ask the moderator to send on toCustomer
JGM and 2 other Law Specialists are ready to help you
Ask your own question now
Customer: replied 3 years ago.

document sent. thanks Andy
Great, I'll look out for it.
Ask Your Own Law Question
I've now read the contract. Thank you for sending it.
You didn't buy the company itself, only the assets of the company for that reason you are not responsible for any prior obligations. It is for the seller to deal with those although as you say in your original narrative it is probably appropriate that you provide some assistance to the customers, especially from a PR point of view.
Ask Your Own Law Question