Legal Question in Business Law in Pennsylvania

business purchase

Hello,

I am in negotiations to purchase an existing business. It is a cash business dealing with entertainment for birthday, bachelor parties, etc. (i.e. dancers).

The price of the business is to include;

1. the rights to the name

2. the rights to the current phone number

3. the cost for the current yellow page advertisement

4. repeat customers

5. a half complete web site

6. continued relations with 11 subcontractors

The current owner has very poor records, (dates & profits marked on calanders). He is willing to reveal his tax returns but being a cash business this presents the potential for hidden receipts, & I can't be positive of the actual gross income.

I'm looking for some way to verify receipts in order to make a reasonable offer without being overcharged.

I am told that there is no entertainment license owned by the business and I have no idea if one is required by the state, city, county, etc.

Also, the subcontractors are not under contract and can leave the agency at will, which can have a dramatic impact on income should they leave the new owner.

I would appreciate any advice as to what avenues to pursue and what type of professionals I should be consulting.

Thanks,

R.D.

2 Answers from Attorneys

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