SMALL BUSINESS PURCHASES & SALES ATTORNEY IN COLLIN COUNTY, TEXAS

When you run a small business, you want to make sure everyone you work with is just as committed to its success as you are. This remains true no matter what stage you’re in, including buying or selling a business. The key to ensuring that this process goes smoothly and your best interests are protected is to work with a qualified business attorney. To speak with a knowledgeable yet personable lawyer about purchasing a new business or selling an existing business, give me a call, Laird Morgan, Lawyer, in Collin County, Texas. 

Types of Business Purchases & Sales

No matter what your business needs are, you will need a professional working on your side who’s knowledgeable about state and local laws, who can help you draft and review contracts, and who will ultimately help you strike a deal that’s in the best interests of all parties involved. They can also give you tailored advice depending on the type of sale or purchase you’re pursuing:  
 

• Asset Purchase or Sale: This type of transaction occurs when one party buys or sells the majority of assets a business owns. This is one of the most common types of business transactions because it lets the new owner obtain the key assets needed to run the business while limiting their involvement with any debts or liabilities. For instance, if you own a bakery and want to sell it, you may sell all your equipment, machines, packaging, and inventory to a new buyer, which will provide you enough money to pay off any outstanding debt and allow the new owner to start out on their own. 

• Stock Purchase or Sale: The other type of business transaction is called a stock purchase, and this generally advantages the seller more than the buyer. Here, the new buyer purchases the majority of the stocks in the business, and this includes taking on any debts and liabilities. For the seller, this means they are now free and clear, and the buyer must address the outstanding debt and tax obligations.  

• Merger: Finally, in some cases, two businesses may come together in a merger, which can include elements of both an asset purchase and a stock purchase.

Important Elements in a Purchase & Sale

Buying or selling a business is a complex process, and care must be taken to ensure all laws and regulations are followed. Together with your business law attorney, you’ll have to address the following topics: 

• Financing: It’s no secret that a transaction like this means big money will be exchanged, and this will require extensive research, negotiation, and figuring out your financing. Whether you’re the buyer or seller, you’ll first want to get an accurate assessment of what the business is actually worth (or what the assets you’re buying or selling are). Only after you know this can you begin to negotiate on a price. If you’re the buyer, you will likely also have to secure a funding source. 

• Compliance Issues: You will also need to consider what compliance issues need to be addressed for the business, and this will vary depending on the nature of the company. This could involve local, state, and federal laws that you’ll need to remain in compliance with, as well as any industry-specific standards and practices. 

• Documentation: This can refer to contracts, corporate documents, closing documents, deeds, leases, and titles, as well as financial and legal documents.    

The Process of a Small Business Sale

The process of selling your business will look slightly different for everyone, but there are several steps that almost everyone will have to go through: 

1. Determine the price you want to sell at. 

2. Research your tax implications that you’ll incur from the sale and factor these into your overall projections. 

3. Start marketing and looking for potential buyers. 

4. Once you have a buyer lined up, begin negotiations. 

5. Draw up your sales documents and sign a sales agreement for closing. 

6. File all the applicable paperwork with the IRS to ensure you’re no longer legally associated with the business.  

The Importance of Due Diligence

Lastly, you should always focus on due diligence when buying or selling a business, and it’s here that an experienced business attorney can really come in handy. When you work with a business law professional, you’ll have a partner who knows everything you’ll need to look out for and everything that could go wrong. This includes reviewing the business’s financial documents, contracts, employee agreements, operating procedures, insurance requirements, tax obligations, property records, and marketing strategies among others.  

Only once all of these factors have been properly investigated and understood should you enter into a sales contract with another party. You don’t want any surprises down the road, and the time and effort you put into the due diligence now will more than pay for itself later.