Austin Business Purchase and Sale Lawyer
In the US, individuals and corporations sell and buy thousands of businesses every year. Small local operations partner and grow to create bigger organizations, and large corporations are always subsidizing smaller businesses. The process is rarely ever straightforward, and the buyers can end up losing a lot of money without the proper experience. Engaging a knowledgeable Austin business purchase and sale lawyer can make a huge difference in the outcomes of these transactions.
It is essential to understand the details of a transaction and its risk before committing to it. Some businesses sell only for their assets. On the other hand, in a complete purchase, the buyer acquires all of the company, which includes its properties, assets, and other tangible resources, in addition to its liabilities, debts, as well as any potential tax ramifications that result from the purchase.
Risk vs. Reward
As a business owner, it can be tempting to grow by acquisition, but it’s important to understand potential risks, including anything that could hinder operations. This includes:
- Securing financing – It is imperative to compare the potential return on investment with the cost of borrowing capital. If the upfront financing outweighs the potential revenue, there is a risk of losing the business. Alternatively, the leverage from the financing could become a valuable asset if the business lives up to its earnings potential.
- Obtaining any licenses or permits the purchased business needs – A buyer needs to understand with is required to run the company and how the parent business will need to change to accommodate the new acquisition.
- Integrating the business – A buyer might decide to entirely change out the management structure of the purchased business. However, it some instances it can be essential to retain managers and their network of clients and contacts, especially in relationship-driven industries. Changing the company’s brand might also be challenging. Adjusting a brand image can have dire consequences, especially to an established enterprise.
- Fixing potential liabilities – Sellers often disclose potential liabilities to minimize the risk of non-disclosure-based lawsuits in the future. Buyers need to carefully review and understand these issues before completing the purchase.
- Valuing the assets – Buyers need to carefully review and completely understand the value and cost of the assets they’re buying. That means, for example, if a buyer purchases a manufacturing facility, they need to understand the maintenance schedule for the equipment and when any of it will need upgrades. This also means understanding the details of their lease and when it needs to be renewed.
Due Diligence is Essential
The buyers needs to understand every aspect of the business he or she buys. The information revealed and evaluated during due diligence will determine whether a sale occurs or not. Professional legal advisors make a tremendous difference during an acquisition, because they can provide expert advice and assist the buyer in evaluating his or her decision.
An experienced business purchase lawyer in Austin, TX will help a prospective buyer understand the business contracts, lease information, corporate records, account information, and other documents essential to the company’ profitability. Since any non-disclosure by the seller could result in future litigation, they should be able to attest to the accuracy of all the company’s internal documents. An experienced business lawyer in Austin, TX is of enormous value for either side.
Speak with an Austin Business Purchase and Sale Attorney
Selling and buying companies can be risky for even the most savvy business people. Foregoing the necessary due diligence and assessment of potential risks, changing ownership of a company could result in a nightmarish situation. Thorsen Legal understands the potential risks of business purchases and sales in Texas. Our team can help buyers or sellers in their ventures with expert and experienced legal support. Contact us today for a free consultation.
Austin Practice Areas
- Real Estate
- Trusts & Estates