Good evening members

I am considering buying a thriving auto repair business which is a PTY LTD. The company is only two years old and has one director who is also the only shareholder. The company has a huge and profitable customer data base and it wouldn't be easy to pass up this opportunity however there are a few details which I am having trouble understanding and making my mind up has become a difficult one.

My key concerns are the owner has been running the business for two years without registering with SARS and currently has two pending legal actions against it buy unhappy customers. I have checked and the company has an excellent reputation with the the exception of the two unhappy customers, one who is suing the company for 52K and the other who has sent the company a letter of demand for refund.

The owner has been very open about everything and is only selling the company after finding out he has terminal illness and can no longer run it. The equipment is all rental contract equipment and so I would be installing my own instead.

The concerns I have are:

1. If I buy the company, will I become party to the pending legal action?

2. Since the owner established the company as a PTY LTD two years ago but never registered with SARS, would there be any legal issues if I buy the company now and register it with SARS?

If there are any other pointer any member here can give me it would be of great help in making a final decision as buying the company or not.

Kind Regards

G