Putting a business up for sale is a major decision. It often happens when a business has not performed so well, or the original owner/operator can no longer continue being involved with the business. In many cases, selling a business can result in profit for the party selling it.
In some instances, the sale or breakup of a business may be part of a larger court order. This can happen for instance if a business is terminated due to a legal violation.
There are many issues to consider when selling a business, such as:
- How to handle or divide business property
- Distribution of profits
- Handling of debts
- Managing tax records, sales receipts, and other documents
- Managing open or ongoing accounts, if any
- Whether or not to change production of products or provision of services
- Creation and negotiation of sales contracts
Perhaps the most common legal issues in a business sale are the division of property and handling of debts. These often require extensive analysis to determine the exact amounts owed.
Business succession planning involves long-term planning of issues like business termination, dissolution, or transferring of ownership rights to another party. Succession planning seeks to answer the question of what might happen if the current owners are not able to continue leading the business. Business succession therefore may frequently address future business sales.
A sale of a business can often be the subject of long-term planning; however, more often than not, a sale of a business results after unforeseen consequences such as a loss of profit. Thus, it’s important to make provisions that anticipate putting the business up for sale in the even that it is required. A properly written succession plan often requires the assistance of an attorney, accountants, and other professionals.
Selling or transferring a business can be a lot of hard work. You may need to hire a qualified business lawyer if you need assistance with the process of selling a business. An experienced attorney can help you with negotiations, legal requirements, filings, and other subjects. Also, if you need to go to court to litigate a legal issue, your attorney can provide you with representation during those meetings as well.