Verify the true financial health of the target before committing.

: Analyze cash flow to confirm it can cover all debt obligations.

: Require the seller to settle all debts using proceeds from the sale at closing.

: You buy specific assets (equipment, brand, inventory) and typically leave existing liabilities behind with the seller.

: You buy the legal entity itself, meaning you automatically inherit all existing business debts and legal obligations. 2. Conduct Deep Due Diligence

If you are using debt to buy the business, explore these standard options:

Legal Considerations for Buying a Business with Existing Debts