There are many reasons why business owners decide to sell their business, Perhaps profitability has dropped, the business could be part of a court ordered sale or the owner could be ready for retirement. Just as there are many reasons behind selling a business, the legal requirements associated with the sale are many and varied.
Legal Issues to Consider When Selling a Business
Here are some issues that can arise during the sale of a business. This is not a comprehensive list, and more issues can be identified by an experienced business lawyer:
- How to liquidate inventory, company vehicles or other equipment
- How to handle distribution of profits and how to pay debts
- Collating and submitting tax documents
- Creating and negotiating sales contracts
- Dissolution of employee contracts, including severance pay
As a business owner, you are responsible for providing the necessary documentation for the sale. This documentation can include:
- Financial statements
- Confidentiality agreements
- Note of seller financing
- Statement of earnings and cash flow
- List of current open accounts
- Inventory list
- Letter of intent
- Purchase agreement with buyer
Do You Need a Lawyer?
This list is only a representation of some of the documentation you will need to legally sell your business. An experienced business lawyer will be able to provide you with a full list of all the documentation you will need, and can help avoid legal issues that can arise from trying to complete a business sale on your own.
Laws concerning the sale of a business vary from state to state, and can also depend on local laws as well. This can cause quite a bit of confusion if you are not well versed in the legal aspect of selling a business. A business lawyer will not only know the proper selling process, but will be able to draw up a comprehensive sales contract that will protect you from future liability, and will assist you in achieving top dollar for your sale.
If you are in the process of selling your business, experienced representation can save you from some avoidable headaches. The law offices of S. Mark Burr, P.C. can assist you in a smooth transaction process. Call to schedule your consultation today.