WHY HIRE A BUSINESS LAWYER WHEN BUYING OR SELLING A BUSINESS?
Updated: Sep 25, 2020
Whether you’re thinking of buying a business or selling an existing one, it’s vital that you have the benefit of a skilled business law attorney since mistakes can be costly. A good business lawyer will minimize risks and maximize benefits, and assist with all interactions, contracts, organization documents, and all aspects of transactions. This article provides general information and does not constitute legal advice.
BUYING A BUSINESS
Your business lawyer will insure that the representations made by a seller are correct and that the business makes the profits the seller represents. It is also critical to have proof of the proper legal formation of the seller, that all of its taxes are current, that there aren’t liens against the assets being purchased, as well as a host of conditions that must be met before a closing can take place.
One of the most important reasons why you should involve our skilled business law attorney as soon as you are considering buying a business is in the preparation and negotiation of the purchase agreement. It is to our responsibility to prepare and negotiate the asset purchase agreement that's most advantageous to you. When individuals take on these responsibilities without the help of a business law attorney, it can have negative consequences that are not realized until it’s too late. Even if a business broker drafts a purchase offer for you, an experienced business law attorney should review it to ensure that the sale closes in the way that all parties intended with the most favorable tax consequences and that you are protected from any post-closing problems.
When it comes to financing your purchase, legal assistance by a business lawyer is critical. He or she will negotiate and draft any necessary loan agreements from financial institutions, and if you’re receiving financing from private investors, your business lawyer will ensure that all legal documents are in compliance with state and federal tax and securities laws.
Your business law attorney will also assist with:
Preparing purchase agreements and closing documents
Advising on post-closing rights and obligations
Reviewing franchise agreements
Reviewing zoning and other local laws affecting the transaction
Attending any municipal or zoning meetings on your behalf
Assisting with requirements of the Small Business Administration
Helping you obtain any necessary licenses or permits
Consulting on integration issues post-closing
Conducting thorough due diligence assessment of the viability of the business
Deciding what form of formal organization is best for your situation
SELLING A BUSINESS
When selling a business the goal of a business law attorney is to protect your interests, make sure you receive everything you bargained for, and then structure the transaction with the most favorable tax consequences possible. A good business lawyer will also help you review many documents, which is called a ‘due diligence review’. These documents include leases, vendor and franchise agreements, material contracts to be transferred, sales and income tax ramifications,
An experienced business lawyer will also assist with:
Creating documents that explain the benefits of your business to possible buyers, and prepare non-disclosure and confidentiality agreements, protecting your confidential information.
Making recommendations to enhance the overall value of your business before you place it on the market
Determining the best ways to structure the transaction
Reviewing and evaluating purchase offers, including identifying the benefits and risks of potential offers
Assisting in the due diligence process, including completing any necessary disclosures, helping to resolve environmental concerns, and tax matters – including sales tax issues
Obtaining proof as to clear title of assets being sold
Working closely with other professionals, including accountants, lenders, financial advisors and business brokers
Preparing necessary documents to complete the sales process
Overseeing the entire sales process, so that there is a smooth transition of your business
Attending closing and preparing post-closing documentation of the sale
RONALD J. AXELROD, BUSINESS LAW ATTORNEY, IN ROCHESTER, NEW YORK, CAN HELP
Ronald Axelrod, a Rochester, NY, business lawyer can help you with every aspect of buying or selling a business. He may also be able to help you obtain financing by connecting you with the appropriate individuals in the financial industry to help you finance your purchase.
In addition, Ronald J. Axelrod & Associates also offers a full range of business brokerage services through its affiliate, Transworld Business Advisors of Buffalo. This business brokerage service assists individuals looking to purchase or sell a business in the Western New York region, including Rochester, Buffalo, Niagara Falls, and Batavia. CLICK HERE to see the complete list of services that Transworld Business Advisors provides, as well as a listing of businesses for sale. If you are considering purchasing or selling a business, please call 585.203.1020 for a complimentary review of your situation.