Buying and Selling a Business Lawyers
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Why Should I Buy a Business?
Purchasing an existing business has numerous benefits. The business, physical location, employees, and customer base are already established, saving the buyer the time and energy required to start a new company. However, a buyer should still carefully review the financial past of the business before taking any action.
Financial Past of the Business
Before making an offer on an existing business, a buyer should thoroughly research the company's financial history. Items examined should include:
- Certified financial records of the existing business
- Employee files, contracts, and benefits
- Past lawsuits, if any exist
- Any contracts the the company has with other companies
- The business' leases
- Any other documents that will apprise you of the problems and potential of the business
Selling a Business
When deciding to sell your existing business, you must be ready to commit some time to organizing all your financial documents and getting the business in order. Also, you should do your best to make sure that the company is not currently facing any legal problems or is at risk of being sued any time soon. That way, there will be no major disruptions during the transfer of the business from one owner to another.
What Should I Do When Preparing to Sell My Business?
- Update financial records - Update and organize the financial records of the business.
- Hire an agent - An agent can help you advertise the fact that your business is for sale and get offers for your business. This individual will also be able to advise you of whether certain offers that come in are worth consideration.
- Value the business - The value of your business can be determined from the financial status (profits, etc.) of your business and the reputation of your business.
- Speak with a lawyer - An attorney can ensure everything is in order for the sale. The attorney will also help you with any sales contracts.
What May Be Included in the Sales Contract?
- Financial arrangements, such as how the buyer intends to pay for the business
- Description of the real property (real estate, buildings, etc.), if any, and the personal property (machines, furniture, etc.) to be transferred
- The minutes of the business organization authorizing the sale, if the business keeps minutes
In order to make sure that all the necessary financial and payment arrangements are made, you should be certain to have an attorney review the purchase contract.
What about the Company's Creditors?
Generally, under bulk transfer laws, when a business owner sells the business, the creditors will still remain. The buyer should get a list of all the creditors of the seller and notify them before she takes over the business. The notice should include such items as the purchase price, the names and addresses of the buyer and seller, and the new address where the seller may be reached, among other things. Check with your local laws for the exact requirements.
Should I Consult an Attorney When Buying or Selling a Business?
Business acquisition and selling a business involves many negotiations and contracts. A business attorney can assist you in the negotiation process to help you get what you want for your future business. An attorney can also help you sift through financial documents to determine what is relevant to the sales transaction. A lawyer can also arrange the real estate sales process, should you ultimately wish to buy or sell the business property.
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Last Modified: 06-30-2015 11:39 AM PDT
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