Buying a business is a great way to start one of your own, or to simply add to the one you have already. If you’re thinking about it, however, there are a few things you should know.

First, is that there are actually two ways to purchase a business. You, as a person or as a corporation, can buy a business by either: (1) purchasing the shares of the corporation; or (2) purchasing the assets of the corporation. In either case, a well-drafted agreement between the purchaser and the seller is an absolute necessity to ensure that you are protected after the transaction closes.

So, what’s the difference? When you take over the shares of a corporation, you take over everything that corporation has—including its property and its contracts, but also its obligations and liabilities. While there may be some tax and legal advantages to handling this kind of a deal, due diligence is always critical.

When you buy the assets of a corporation, however, you are simply choosing which things you want to buy from the corporation. That might include equipment, client lists, phone numbers and websites, and it may be contingent on having their contracts assigned to your own company, rather than assuming theirs. This is an important distinction.

In this age of technology, small business owners are increasingly turning to the internet to download agreements for purchases. While the net is a source for cheap services, you can most certainly expect cheap results. No two businesses are the same in all aspects and each business requires specific questions to be asked and specific issues to be addressed. Needless to say, if your agreement is missing key components, you may be legally obligated to proceed with the purchase and assume liability that you didn’t even know existed.

As a purchaser, you should have a full understanding of what you’re buying and ensure that you are getting exactly what you are paying for. For example, you may purchase a corporation for $50,000.00 only to discover after closing that there is a lawsuit pending against the corporation for $500,000.00. Another example would be if the corporation operates out of a leased office. In this scenario, you will need to know what it will take for the landlord to consent to a transfer of the lease, and if any of the material terms of the lease are changed.

Whether your transaction is for $10,000.00 or $10,000,000.00, the same attention and care need to go into the due diligence process because liability can arise at every corner if you are not careful. It is important to start off on the right foot and have a qualified legal professional draft or review the purchase agreement before you sign and bind yourself.

With the right lawyer in your corner, you can be sure that you get what you paid for.