Buying or Selling a Business
Buying or selling a business can be risky business, if not handled properly. Make sure you leverage an experienced business attorney for your team.
Business acquisitions: Buying or selling a business
Congratulations! You’re reached a point in your life where only a very few can claim to have traveled! You can either sell that business you’ve worked so hard to grow, or you have the financial means or wherewithal to acquire someone’s business.
Are you selling a business? If so, there are many issues you need to work through, to make sure you sell your business properly. The two biggest issues are (1) getting paid and (2) actually walking away once the deal closes (i.e. not getting sucked into future lawsuits or liability issues). This takes careful planning and the proper purchase agreements and/or promissory notes to pull off effectively. If your buyer needs special payment arrangements (i.e. intends on paying with proceeds from the business over time), you need to carefully think through the scenarios and potential problems, and make sure they are addressed. If payment stops, you need to make sure you have effective mechanisms to collect or repossess the business, and that there is a business (and assets) to actually repossess.
Whether buying or selling a business, you need competent representation to do things right.
Are you buying a business? If so, you have much risk to sort through. Aside from conducting the proper due diligence, to need to make sure you’ve properly accounted for all the assets and liabilities, making sure that existing assets actually transfer with the sale and are unencumbered (i.e. don’t suffer from liens, mortgages, promises, UCC filings, etc) and that you are properly protected from those liabilities you don’t wish to assume and those liabilities you may be unaware of (i.e. potential lawsuits, notes, unknown accounts payable, etc). Furthermore, don’t assume you can simply step into the business and it keeps working like clockwork. You need to renegotiate with any landlords and vendor lines-of-credit. You need to properly assume important contracts, and repudiate those you don’t want.
You need more than your business broker for help
While brokers fulfill a very important role in finding a buyer or seller, their entire goal is to make a deal happen. They will claim they have documents for you, so you don’t need an attorney or CPA. They will claim they’ve done this a million times before, and there is no risk. They will claim they’ve “reviewed the business” and you have nothing to worry about. In the end, they will say anything to help close the deal. The problem is, brokers just don’t have the training, experience or incentive to make sure your t’s are crossed and your i’s dotted.
L4SB can help make sure the sale or purchase of your business is successful.
Law 4 Small Business (L4SB). A little law now can save a lot later.
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