The decision to buy or sell a business is one of the most important business decisions you will ever make. Whether you are buying or selling a business, our Fairfax business attorneys can help you identify your priorities, negotiate a deal, and execute a fair agreement.
Getting Ready to Buy a Business
Buying an existing business often has advantages over creating a business from the ground up. However, whether you add to your existing business or begin a new venture by purchasing a business entity, you need to do due diligence, which includes careful consideration of the following for the business you are considering purchasing:
Financial assets and liabilities.
You will want to carefully consider cash flow statements, bank accounts, balance sheets, accounts payable, accounts receivable, credit lines, loan agreements, and other financial documentation to determine the company's financial assets and liabilities. Your accountant, tax advisor, or another financial professional may help you look at all applicable documentation to determine the business's short- and long-term economic outlook.
A thorough investigation of the business's physical equipment, inventory, and property is essential to your research. You want to make sure that everything is in good order and valued appropriately so that you won't incur any unexpected expenses for repairs or replacements.
Property leases, equipment rentals, vendor contracts, employment contracts, and other types of contracts are essential for many businesses. As a buyer, you need to know the terms of existing contracts and which contracts you will be responsible for fulfilling once the business sale is complete.
All of this information will allow you to accurately value the business you are looking to buy.
Preparing to Sell Your Business
As a seller, you want to make a financially advantageous sale and ensure that the business you worked so hard to build is in good hands after you leave. Accordingly, you want to:
Value your business fairly.
You want to get top dollar for your business. While the actual value of your business will be decided during negotiations with the buyer, you should consult with experts to decide on an initial price for your business based on your assets and liabilities.
Understand the tax implications of the sale.
Talk to your accountant about the possible tax implication of the sale. The tax implications likely differ depending on whether you are a sole proprietorship, partnership, LLC, corporation, or other business entity.
Get your business ready to sell.
You want everything to look as good as possible, including your business's physical location and your business records.
Find the right buyer.
You may have an interested employee, friend, or business associate who wants to purchase your business. However, it may still be in your best interest to advertise that your business is for sale so that all potential buyers will be notified.
You will have to do all of this while still running your business, but you don't have to do it alone. An experienced business lawyer can help you get your business ready to sell while you continue to operate a profitable business that attracts qualified buyers.
Negotiating and Completing a Business Purchase or Sale
Buyers and sellers have competing goals. Compromise is required to reach a deal that both parties agree to execute.
We can represent you if you are looking to purchase or sell a Virginia or Maryland business. We will make sure you fully understand all of your options, and we will negotiate to make sure that your business priorities are included in the business sales agreement. After that, we will prepare everything for closing so that you know what to expect and so that the business transfer happens as seamlessly as possible. The required documentation may include the following:
- Letter of intent
- Confidentiality agreement
- Promissory note
- Transmission of patents, trademarks, and copyrights
- Non-compete covenants
- Business sale agreement