Buying a Business
Purchasing an existing business has its benefits. The business, lease, employees and customer base are already established, saving the buyer time and energy. However, a buyer should still carefully review the financial past of the business before taking any action.
Financial Past of the Business
Before making an offer on an existing business, a buyer should thoroughly research the business’ financial history. Items examined should include:
- Certified financial records of the existing business
- Employee files, contracts and benefits
- Past lawsuits, if any
- Any contracts
- The business’ leases
- Any other document that will apprise you of the problems and potential of the business
Selling a Business
When deciding to sell your existing business, you must be ready to commit some time to organizing all your financial documents and getting the business in order.
What Should I Do When Preparing to Sell My Business?
- Update financial records – Update and organize the financial records of the business.
- Hire an agent – To help you get offers for your business. This individual will also be able to advise you of whether certain offers that come in are worth consideration.
- Value the business – The value of your business can be determined from the financial status (profits, etc.) of your business and the reputation of your business.
- Speak with our firm’s lawyers – to ensure everything is in order for the sale. We will also help you with any sales contracts.
What May Be Included in the Sales Contract?
- Financial arrangements, such as how the buyer intends to pay for the business
- Description of the real property (real estate, buildings, etc.) if any, and the personal property (machines, furniture, etc.) to be transferred
- The minutes of the business organization authorizing the sale (if the business keeps minutes)
- In order to be sure that all the necessary financial and payment arrangements are made, be certain to have our attorney review the purchase contract.
What About the Seller’s Creditors?
When a business owner sells the business, both the buyer and seller should be certain to take care of the former business’ creditors.
Generally, under bulk transfer laws, when a business owner sells the business, the creditors will still remain. The buyer should get a list of all the creditors of the seller and notify them before she takes over the business. The notice should include such items as the purchase price, the names and addresses of the buyer and seller, and the new address where the seller may be reached, among other things. Check with our attorneys for the exact requirements.
Should I Consult an Attorney When Buying or Selling a Business?
Business acquisition and selling a business involves many negotiations and contracts. We can assist you in the negotiation process to help you get what you want for your future business. We can also help you sift through financial documents to determine what is relevant to the sales transaction. Finally, we can also arrange the real estate sales process, should you ultimately wish to buy or sell the business property.