So You're Buying/Selling a Small Business
Is your business legally prepared for a major transaction? Many successful small businesses undergo dramatic transitions in their lifetimes. Perhaps you’re looking to grow, and a local competitor is closing their business and retiring. Or, perhaps you’ve seen your successful business grow to the point that a large competitor has noticed, and is ready to hand over your big payout.
From a risks and liabilities perspective, these major transactions are a vulnerable time for business buyers and sellers, alike. Here are some of the ways hiring a competent business lawyer can protect your company through such a process:
A competent business attorney knows the major pitfalls of these kinds of transactions. Did you know that many loans will go into default if a borrower transfers ownership of the collateral or if the borrower company’s ownership is changed in any way? These kinds of risks are rampant in the business transaction arena; a competent business lawyer will help you identify these and other legal hazards.
A competent business attorney can structure the transaction in a way that makes the most sense. Will the transaction be a stock transfer or an asset transfer? Knowing the difference can simplify the transaction and can also help you to avoid picking up unwanted creditor liabilities.
A competent business attorney can draft clear, unambiguous contracts. Is some part of your buy/sell agreement susceptible of two different meanings? Confusing contractual clauses can instigate, drive, and prolong expensive and time-consuming litigation. Entire lawsuits are often driven simply because a contract can be interpreted in two different manners, each of which favors one or the other party. A competent attorney will keep your documents concise and above all, clear.
If your small business is undergoing a major transition, we at Asheville Legal are here to help you navigate that process, and to minimize your legal risks. Give us a call to learn more.