Owning a business is a big responsibility. Concerns about customers, employees, vendors, payroll, profits and overhead are a constant presence in your thoughts.
So it makes sense that the process of buying or selling a business won’t be simple. There are moments along your journey where you’ll say to yourself “It seems like I should have a lawyer for this.” You should listen to that voice. Let’s take a look at some of the things you’ll be facing when you buy or sell a business, and how an attorney can help you navigate through the process.
Buying a business
Purchasing a business, as opposed to building one from the ground up, has its advantages. The employees, customers, and physical location are already there for you, saving you time and energy. But that doesn’t mean purchasing a business will be simple.
Before extending their offer, a buyer should do a detailed review of the business’ financial history, looking at things such as:
- Employee files, contracts and benefits
- Contracts with other companies (if any)
- Past/current lawsuits (if any)
- Financial records
Selling a business
If you’re preparing to sell, you’ll want to have all of the documentation we just mentioned ready to hand over to potential buyers. It’s also a good idea to make sure the company isn’t facing any legal problems. This helps ensure there are no disruptions as the business changes hands.
In addition, there are a few other steps to take when selling a business:
- Update your business’ financial records.
- Review your financial status. What kind of profit are you making? What kind of reputation does the business have?
- Prepare a list of your creditors. Typically, these will transfer to the new owner. You should notify creditors of the impending sale, and provide them with information about the purchase price, and contact information for yourself and the buyer.
- Hire an agent, in order to help advertise the sale and field and evaluate offers.
- Speak to an attorney.
How an attorney can help
There are a number of elements involved when you buy or sell a business, which is where an attorney can help. Having a lawyer with you at the negotiating table can help you get the best deal possible. Your lawyer can also review financial documents to make sure you haven’t missed anything important. A lawyer can help you if you’re buying or selling real estate associated with the business.
And – perhaps most crucially – an attorney can review the sales contract. The contract will likely include details on how the buyer intends to pay for the business, as well as a description of the real property and personal property – equipment, furniture, etc. – that will be transferred.
Having an attorney can help ensure that you’ve ironed out all necessary financial arrangements, and advise you on transfer law as it relates to the company’s creditors.
Are you ready to buy or sell a business? Consult with Benner and Wild
If you’re preparing to buy or sell a business and want to consult with an attorney, contact the Bucks County law firm of Benner and Wild.
Our attorneys are experts with all aspects of business law, and regularly represent buyers and sellers in the sale and purchase of assets, stock, limited liability company membership units, corporate reorganization and a number of other business transactions.
We understand that there’s a great deal of care and due diligence that need to happen before engaging in a business transaction. You’ve worked hard to build a business, and it takes a lot of work to be able to buy a business. Let us do some of that work for you.