good will in new business
I bought a second hand motorcycle business for R150000 beginning of August.
All stock on floor as Sell on behalf, 50 bikes @ R1000 each.
+- R40000 for accessories stock
The rest R60k for the name & good will.
Soon as I took over there were only 38 bikes on the floor.
Within the first month the previous overs bad dealing of not paying seller went viral on Social media, people were attacking my business and not him. Saying I am Bike Africa and I am responsible. Things got o bad that customers were removing bikes from our floor for fear of non payment. When we tried calling new customers they would not deal with us due to bad publicity. Things got so bad that we have had to change our name, so why pay for good will that he has destroyed and a name that is of no use. Still today 4 months later we are getting calls from customers that are waiting for payments from previous owner.
I have legal cover that can cover legal costs.
Is there anything I can do ?
Acquisition refers to the buying of an entire company or business as a going concern. Due diligence check is usually the first step the buyer must take when looking forward to acquire a business. The reason is to ensure that the business you intend to take over is indeed worth the value. Other factors to check beforehand will include tax and regulatory compliant. Legal advice for the takeover preparation is vitally important.
With regard to your situation, speaking to your lawyer would be your starting point.