What Is Involved in The Purchase of A Commercial Business?
Jan. 31, 2020
Similar to any purchase in life, the acquisition of a commercial business is a major process that requires every detail to be examined. Due to the nature of a commercial business purchase, both the buyer and seller should seek legal representation to ensure that their rights and interests are protected. In some cases, an ill-advised contract may place one party in a compromised position. Throughout the purchasing process, the individual who is looking to obtain a business should carefully review every aspect of the contract. The acquisition of a commercial enterprise can be a relatively simple process if the arrangement is fair and by the books.
To ensure that your financial interests are protected throughout the purchase of a commercial business, it is critical that every detail be considered and reviewed. For example, understanding the positives and negatives linked to the business is a good indicator of where the price should be set. Factors such as location, gross profits, operational concerns, the possibility of growth, liability issues, economic downturns, and leasing agreements need to be considered. In addition, the amount of time and effort that will need to be allocated toward the business should also be included in the evaluation process. A business that is struggling to make a profit should be appraised differently from a company that has a positive cash flow.
Creating a Comprehensive Contract
If the buyer is still interested in purchasing the business after performing an evaluation, a legal document that includes all of the details of the purchase agreement will need to be drafted. Essentially, this purchase contract will outline the entire transaction. In many situations, additional documents may be required, such as the following:
Business purchase letter of intent
Transfer documents for any relevant copyrights or trademarks
In certain cases, the seller of the business may not agree with the initial contract that is drafted by the buyer and his or her lawyer. In the event that this happens, it is important to work with legal representation to determine what will need to be done to finalize the deal. During these negotiations, flexibility may be required in order to complete the purchase. Any contract that is agreed upon must be within the legal guidelines and statutes set at the local, state, and federal levels.
Contact a Fairfield County Business Acquisition Lawyer
If you are interested in buying a business, regardless of the size or type of industry, it is imperative to consult with skilled legal counsel. A contract that is not well thought out and reviewed could leave a buyer financially insecure and unsure of how to proceed. At the Law Offices of Peter V. Lathouris, LLC, our team of experienced Long Island Sound business law attorneys can provide you with aggressive representation throughout the purchasing process. To schedule a free 30-minute consultation, call our office today.