Selling a business is major task that can involve many different steps and legal issues. Some legal issues that can exist during a business sale can include:
- Outstanding debts
- Unpaid tax issues (especially property tax matters)
- Maintaining business ties with previous contacts
- Business succession issues (i.e., transferring the business)
- Dealing with private information and confidential matters (employee information, trade secrets, copyrighted info, etc.)
Forming a proper contract for the transaction is also a major concern. When selling a business, the parties may often need to agree which parties will be responsible for the various legal issues. For instance, the buying party may be willing to assist with outstanding debt. This is not always the case, and so each sales contract is going to be different. Many other types of legal issues can arise in the process.
Does a Business End When It Is Sold?
Not necessarily- in fact, many businesses continue to operate during the process of changing ownership. For instance, if the previous owner did well with the business and wished to retire, they may consider selling the business while it is still profitable. Thus, selling a business is not the same thing as closing it down or winding up a business.
However, there are still many filing requirements that must be met when a business is sold. For instance, the parties need to file with local and state authorities informing them that a change of ownership will be happening. They may need to file addition papers in order get approval for the changes.
What Other Steps Need to Be Fulfilled Prior to a Sale of Property?
In many cases, the city or state may send an inspector to have a look at the business property before the final sale and transfer. If they find any violations or non-conformities, they may require the new owner to address these. A common example of this is where the building contains old materials that are toxic or outdated (such as lead-based paint). Here, the seller of the business property would need to inform the potential buyer that such issues exist. The violations may need to be fixed before the final sale.
Do I Need a Lawyer for Help Selling a Business?
Selling a business requires much planning and foresight. You may wish to hire a lawyer if you’re considering selling your business. Your attorney can help you draft and negotiate a contract, and can ensure that your rights and interests are being represented. A qualified business lawyer in your area can also represent you if you need to file a claim in court for any violations or disputes.