Free Articles - Table of Contents
Business Matters
Deducting the Business Use of Your Home
Should You Incorporate Your Business
Human Resources
ADA Protects Employees with Cancer
Update Social Security Number Verification for Employers
The Dangers of Employee Internet Use
The Hazards of Resume Screening
Real Estate
Landlord/Tenant-Insurer May Sue for Fire Damage
Miscellaneous
Good News For Those Who Struggle With Legal Risk
Partnerships And Limited Liability Companies
A Few Well Chosen Words About Contracts
Contractor Shielded From Liability
"Pop-ups" Annoy But Don't Infringe
Sale Of A Business
There are many reasons to consider buying or selling a business. Whether you are purchasing a business to start your career, expanding an existing business with the addition of subsidiaries or the purchase of assets, or ready to move on from your current business to another business or retirement, you will face many decisions that must be made, and actions that must be taken. Davis Law Associates can help to guide you through this process.
The sale of a corporation can be structured either as a sale of the assets of the business, or as a sale of the stock. The decision of how to structure the sale will depend on may factors, including whether the corporation has liabilities or non-transferable contracts, and whether the owners wish to keep, or the buyer does not wish to purchase, certain assets of the corporation such as its name, its intangibles or company cars. In either situation, both the buyer and the seller will need to evaluate the assets of the business, including its hard assets- equipment, inventory, office furniture as well as intangibles such as trademarks, service marks, trade names, patents, and goodwill of the business as a going concern.
The buyer will need to do his or her “due diligence” by investigating all aspects of the corporation. Due diligence will involve reviewing financial statements, checking to see if state and federal taxes have been paid, ensuring that the corporation is in “good standing” with the Secretary of State, contacting the labor board to determine if employee claims are outstanding and checking with the courts to see if the corporation is or has been involved in litigation. The buyer will also want to contact the seller’s insurance company to see if the corporation has a good record with the carrier, or if their coverage has been transitory. The corporation’s lease and other contracts may need to be transferred or assigned to the buyer.
Buyer and Seller will need to enter into a purchase agreement, which may call for promissory notes or personal guarantees. Corporate action may need to be taken on both sides of the transaction and documented to ensure that the sale has been properly authorized. If you’re thinking of buying or selling a business, or want more information about business sales, call Davis Law Associates at 858-793-1220.