Buying & Selling a Business

Buying or selling a business of any size can be a daunting and complex process. Depending on the circumstances of the business purchase or sale, there are important pre-sale tasks that must be done (see below). There are also voluminous documents that need to be prepared, reviewed and signed–all of which place binding obligations on both the buyer or seller.

What Are The Legal Costs of Buying or Selling a Business?

The legal costs associated with buying or selling a business are typically related to the dollar value of the transaction – at least that is how we approach legal fees at The Jacobs Law LLC. Why? A business being sold for $5M is likely to require (1) more document preparation, (2) more diverse assets for which title needs to be transferred and (3) broader and deeper due diligence than a business being sold for $50K.

Many other factors also impact the cost of buying & selling a business, some of which include: (1) is there a state, federal or municipal license or permit involved (e.g. liquor license, commercial fishing license), (2) seller’s preparation for the sale (has the seller gathered all the documents necessary or must the lawyers do so), and (3) are there liens, UCC filings or other encumbrances on the business assets.

Using Confidentiality / Non-Disclosure Agreements to Protect Your Business

The seller of a business will often refuse to disclose certain business information (such as financial documents) to a potential buyer until that buyer signs a confidentiality agreement / non-disclosure agreement and/or pays a deposit of some amount. This helps to protect you and your business from snooping competitors or others with no intention of buying the business.

The Importance of Hiring an Independent Lawyer

Not only is it extremely important that an attorney draft the appropriate purchase and sale documents, it is equally as important that both the business seller and business buyer know and understand the substance of such agreements before signing any. Therefore, even if you have not used independent legal counsel for the entire purchase and sale process, you should absolutely consult a lawyer before signing any documents.

Pre-Sale Tasks: Business Valuation & Due Diligence

There are many pre-sale tasks that need to be completed when you’re involved in Buying & Selling a Business. These tasks include business valuation and due diligence, which encompass the review of profit/loss statements and tax returns, cross-referencing business bank statements, reviewing customer lists, examining business contracts, searching the UCC, cataloging inventory, and verifying ownership of trademarks, copyrights, and/or patents. There may also be other tasks specific to the type of business you’re buying or selling.

The Jacobs Law LLC: Your Trusted Lawyer for Buying & Selling a Business

Having an attorney is crucial when you’re Buying & Selling a Business. At The Jacobs Law, LLC, our Business Law Attorneys guide and support clients through the entire process of buying and selling businesses.

Our Business Law Attorneys provide the following specific legal services for the purchase or sale of a business:

• Sale Price Negotiation Assistance and Support
• Purchase Price Adjustment for Prorated Items Such as Rent, Utilities, and Inventory up to the Date of Closing
• Draft and Review All Purchase and Sale Documents and Due Diligence
• Promissory Notes – Prepare, Draft and Review (applicable when the seller finances all or part of the buyer’s purchase)
• Security Agreements – Prepare, Draft and Review (applicable when the purchase of a business is financed by any party)
• Regulatory Compliance Review at the Local, State and Federal Levels (where applicable)
• License Review (ensure the seller’s licenses transfer to the buyer, or buyer is able to acquire all necessary licenses to operate)
• Uniform Commercial Code (UCC) Financing Statements – Prepare, Draft, Review and File (applicable when the purchase is financed)
• Assumption of the Business’ Existing Lease – Prepare, Draft and Review All Necessary Documents
• Transfer of Business-Owned Vehicles – Prepare, Draft and Review All Necessary Documents, Including a Bill of Sale
• Verify and Transfer the Business’ Intellectual Property Assets (all Patents, Trademarks, and Copyrights)
• Review Franchise Documents (where applicable)
• Prepare, Draft and Review Non-Compete and Confidentiality / Non-Disclosure Agreements
• Prepare, Draft and Review the Closing or Settlement Sheet

THE JACOBS LAW | Your Attorneys for Buying & Selling a Business

A Business  Attorney at The Jacobs Law LLC can assist you in all the various aspects of buying or selling your business. Contact a Boston Business Attorney at The Jacobs Law today to begin the process of preparing your business for sale or for legal representation throughout the process of buying a business.