BUY & SELL BUSINESS
Privately held business are generally sold in one of two ways, either:
A stock purchase, where the buyer purchases all or a majority of the seller’s stock to assume the seller’s position, including the seller’s liabilities and debts, making it the preferred method of sale for sellers.
An asset purchase, where the buyer purchases some or all of the seller’s assets, like inventory, intellectual property or equipment, without acquiring the seller’s liabilities and debts, making it the preferred method of purchase for buyers.
Consulting a lawyer and a financial advisor can save you time and money with your:
- Due diligence, negotiations and deal structure
- Drafting the Buy-Sell Agreement
As well as, minimize your legal and tax liabilty.
THE PROCESS OF BUYING AND SELLING A BUSINESS
Due Diligence, Negotiations and Deal Structure
In the initial stage of buying and selling a business the parties typically enter into a mutual non-disclosure in order to make legal, financial and proprietary disclosures necessary for the buyer to determine the value of the seller’s company and assets.
The parties and their lawyers will typically review:
- Documents of incorporation, operating agreements, shareholder agreements
- Intellectual property holdings such as, trademarks, copyrights, patents, assignments and licenses
- Profit and loss statements, all financial accounts receivable and owing
- Client and vendor contracts, manufacturing, distribution
- Employee contracts, particularly if there are key employees the buyer wishes to retain
At this stage the parties often enter into a Letter of Intent on key deal terms, and while these letter are generally non-binding, material terms can be formalized and made enforceable through a properly drafted letter of intent.
Drafting the Buy-Sell Agreement
Regardless of what the formal, purchase-sale agreement is called, it’s the instrument that details all aspects agreed to buy the parties, including but not limited to, financing terms, what documents, assets, accounts and inventory will be delivered, as well as the terms of closing. Hiring an attorney with experience buying and selling companies, is crucial to ensuring your assets are protected and liabilities are minimized.
The closing is where all remaining documents are executed and notarized to formalize the transfer of stocks and/or assets. Any recording of documents relating to real estate, motor vehicles, etc. will take place at this time and funds due at the time of purchase will be transferred by the parties or be disbursed by the escrow agent.
The Kinney Firm can prepare the following agreements and more:
- Master Service Agreements
- Statements of Work
- Website Developer Agreements
- Website Designer Agreements
- Graphic Designer Agreements
- App Developer Agreements
- Work for Hire Agreements
- Independent Contractor Agreements
- Employment Agreements
- Consulting Agreements
- Trademark Assignments
- Copyright Assignments
- End User License Agreements
- Distribution Agreements
- Social Media Marketing Agreements
- Intellectual Property License Agreements
- Commercial Leases
- Residential Leases
- Sponsorship Agreements
- Endorsement Agreements
- Social Media Influencer Agreements
Do you need help with your Intellectual Property, E-commerce or Business & Legal Consulting? Let us give you the answers you need.
Tell us your problem and we will tell you exactly how we can assist you. We offer a suite of services to enhance, protect and grow your business. Do you need help with a trademark, copyright, or business formation? Legal Consulting, E-commerce, or Startup Consulting? We will put together a customized solution for your specific needs. Contact us to schedule your consultation.