MUSCAT : In line with its commitment to strengthening support to Small and Medium Enterprises (SMEs), Bank Muscat’s Retail Enterprises unit (Najahi) recently organised a discussion on the legal aspects to be considered while buying and selling a business. The online session, which was telecast through the bank’s social media channels was moderated by Abdullah Al Jufaili, Head, Retail Enterprises Unit (Najahi), Bank Muscat, and hosted Basma Al Kiyumi, lawyer and the founder of the BK Legal Consultancy. The session dealt with a number of important topics, which have to be considered while starting, buying or selling a business.
Basma Al Kiyumi, who is authorised to practice law in the courts of England and Wales and in Oman and is also the author of the book, “The Constitutional Experience in Oman”, spoke about the legal aspects and considerations that must be taken by sellers and buyers of commercial projects. She pointed out how it was important to know both the business and legal details before making any decision.
It is vital not to rely on the opinions of the buyer and seller alone, but take into account the advice of a neutral third-party who can evaluate a business deal objectively and prepare a fair evaluation that takes into consideration the price of different assets, liabilities, disclosures and the like. She explained that a deal should be evaluated both at the commercial level and from a legal standpoint. Many a time, buyers do not thoroughly read and evaluate the preliminary agreement with the seller and is in a rush to conclude the deal. The buyer later discovers many obligations and liabilities that were not considered while agreeing on the deal.
Financial obligations can be many, and the buyer must be aware of all of them when negotiating with the seller, so that additional financial burden is not incurred. Basma explained that in cases where a buyer encounters a problem, he/she must review the terms of the contract and try to resolve it in a satisfactory manner. But in case of undocumented liabilities, it can be difficult to reach an agreement with the seller, especially in cases where the validity of the legal agreement between both parties has expired. She answered questions on situations where an undisclosed liability surfaces after the sale process. Basma also discussed if the seller can revoke any personal or commercial guarantees with financing institutions after the sales and whether the original owner would be liable in case the company failed to clear its liabilities in the future after the sale process.
Basma pointed out that insurance coverage could be available for the business and explained that it was important to organise this coverage for the business as well as employees and the projects that the business dealt with so as to prevent unexpected losses. She also answered a number of relevant questions from the audience during the session.
Speaking about the success of Najahi Talk, Abdullah Al Jufaili, Head, Retail Enterprises Unit (Najahi), said: “We are pleased to continue Najahi Talk sessions through the bank’s social media platforms every month for the benefit of entrepreneurs. These virtual sessions enjoy a great following from our customers and the general public and they are able to gain immense knowledge through the same. Najahi will continue to facilitate these knowledge-sharing sessions on different topics of interest to entrepreneurs. The entire discussion has been uploaded on Instagram for the benefit of viewers who were unable to catch the event live.”
Najahi Talks is an important part of Bank Muscat’s strategy to support the growth of SMEs to benefit the national economy. Bank Muscat offers non-financial support to SME entrepreneurs through knowledge-sharing sessions such as Najahi Talks and Maharat Min Google. Najahi Talks sessions are usually held in the first week of every month and details are updated on the bank’s social media accounts for the benefit of those who are interested in participating in these knowledge-sharing sessions.
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