Business Sales or Purchases
Many people dream of owning their own business and being their own boss. In some cases these people will start their own business from scratch, so to speak, or, in other instances, they will buy an existing business which someone else has already started.
When buying or selling a business, what you buy/sell is in part dependent upon how the business is set up in the first place. If the business is a sole proprietorship, then the transaction will involve the purchase or sale of the assets of the sole proprietorship. If the business is a partnership, the transaction could involve a purchase of the partnership assets or it may be a purchase/sale of a partner’s interest in the partnership which then creates a new partnership. Lastly, if the business is an incorporated entity, then the transaction may be completed by purchasing the assets of the corporation or it may be completed by purchasing the corporation’s shares from some or all of the existing shareholders.
No matter what type of business purchase/sale you are looking at completing, there are many legal and practical issues which need to be considered and addressed as part of a well drafted agreement of purchase and sale. Even the purchase or sale of a small business can often benefit from the due diligence of a lawyer’s involvement. In the case of the seller of the business, a lawyer can often assist in structuring a secure payment plan and ensure that post closing liabilities are maintained at a minimum and well understood by the purchaser. For a purchaser of a business, a lawyer’s due diligence in the transaction can insure that the purchaser does not inherit any unwelcome liabilities from the prior owner of the business and insure that the purchaser obtains good title to the assets or shares that are being transferred.
Should you have any questions about the purchase or sale of a business, please feel free to contact us.