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Top 10 employment liabilities to look out for when buying a business

Overview

Business purchases present numerous traps for the unwary, particularly in terms of the employment liabilities which may be transferred.


When a business is being sold, the Transfer of Undertakings (Protection of Employment) Regulations 2006 will almost always apply. The dramatic effect of this legislation can come as a nasty surprise for a buyer.


All employees employed in a business immediately before a sale will transfer to the purchaser automatically on their existing terms and conditions of employment, with their continuity of employment preserved and with nearly all of their existing employment rights and liabilities.


It is these rights and liabilities that can cause a major headache for purchasers. In this article, Shoosmiths considers the top 10 liabilities a buyer may face when purchasing a business.


 

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