Dallas Business Purchase and Sale Lawyer
Thousands of companies are bought and sold every years in the United States, from small businesses to large multinational corporations. Furthermore, mergers and acquisitions occur across industries, from landscaping and automotive repair to manufacturing and construction. But the common theme among all of them is hidden risks that could result in substantial financial liability to the buyer. And the less experience you or your law have, the greater the risk. Fortunately, an experienced Dallas business purchase and sale lawyer can help.
Acquiring the Assets or the Entire Business?
You need to determine whether to purchase just the business’ assets or the entire company. In an asset sale, the buyer acquires only the assets and goodwill of the business, leaving the actual entity in the seller’s hands. In a company sale, the buyer takes the place of the existing owner, which means they inherit the company’s legal entity, liabilities, and debts.
Your choice will have valuation and tax implications. Sellers usually prefer to sell their entire business because they get preferential capital gains tax rates and eliminate all liabilities and debts. Buyers, however, usually want to only acquire the assets, because it enables them to immediately depreciate the assets and eliminate any business torts liabilities and debts from the valuation calculation.
Mind the Details
First time buyers often make the mistake of getting blinded by the excitement of owning a business, and as a result, fail to do proper due diligence. This is why it is essential to engage an attorney who has led many business purchases. The lawyer knows what warning signs to look for and ways to resolve them before the business sale is completed.
Many different types of delays can occur during a merger or acquisition, including delays in lease renewal, delays in obtaining licenses, approvals, or permits, and delays in financing. An experienced M&A attorney can write a business purchase agreement so that the buyer is protected in the event these delays occur.
Do Your Due Diligence
Buyers need to fully understand the business they are purchasing. The act of obtaining these details is known as due diligence. The information you uncover during this process can persuade or dissuade you from going through with the acquisition, as well as the price you’re willing to pay for the business.
Because most of the important information is with the seller, it’s essential to engage an experienced professional who are familiar with type of business, the industry, and the kinds of documents and agreements these businesses use. Contracts, leases, inventory records, account books, and other files that affect the business’s profitability should be reviewed by professionals.
It is also important to ensure that part of the purchase price is held back for a reasonable period of time and that that seller guarantees the accuracy of the documents they provided. The excellent business attorneys can obtain both clauses for you.
Consult an Attorney Before Buying or Selling a Business in Dallas
Mergers and acquisitions is one of the most complicated areas of law. If you have never bought or sold a business before, it can be very risky. At Thorsen Legal, we know where the risks are and how to protect against them in the sales contract. Let an experienced Dallas purchase and sale attorney from our team work for you. Contact us for a free consultation.
Dallas Practice Areas
- Business Law
- Real Estate
- Trusts & Estates