Buying an existing business: Uncle Sam and the fine print

Check to make sure that all tax payments are current, including sales and unemployment tax. Payroll taxes are the first to slip when a company has cash flow problems. Any Internal Revenue Service audits in the past? If so, what was the outcome? Look at all patents, copyrights, trademarks or logos, and note the expiration dates.

Your state's department or division of sales tax revenue can confirm if sales tax payments are up to date. Your accountant's examination of financial and bank statements will determine if payroll and corporate income taxes are being paid on time. Corporate attorneys specializing in trademarks, patents and copyrights can conduct searches and examine business files to determine legitimacy, values and expiration dates.