Selling Your Business? 3 Reasons You Need A Lawyer
Selling a business can be complicated, and it is much better to do this with the help of a lawyer, like professionals like Valerie M Little, than to try handling it alone. The lawyer you hire will do a number of different things during this process, and there are three main reasons you should have a lawyer there to help you with this task.
To Prepare the Business For Selling It
Before you list or advertise the sale of the business, there are steps you must complete. One of the first steps your lawyer may recommend is getting a professional business appraisal. This step is completed to find out how much your business is worth, and the person that completes the appraisal will be an expert with business valuations.
This is the only way to truly know how much you should ask for your business, and it will help you through the negotiations when you find a prospective buyer.
Before the sale, your lawyer will also ask you to gather certain documents. This can include:
- Current financial statements
- List of assets
- List of debts
- Current contracts you are in
- Copies of tax returns
Potential buyers will want to see all of these things and more. If you get these documents ready prior to the sale, it could expedite the sale of your business.
To Ensure Legal Transfer of Assets and Debts
The second reason you need a lawyer is to make sure that everything is transferred properly to the new owner. The worst thing to find out after the deal closes is that you are left with debts in your name. Your lawyer will take the right steps to ensure that every single debt you owe is transferred to the new owner.
Another issue your lawyer will handle is the transfer of contracts. If you have a contract with a certain business for some type of service, this business could hold you to the contract if you do not transfer it properly.
Finally, the lawyer will work on the legal transfer of every asset you own too, including intellectual property rights.
To Create the Sales Agreement
The final reason to have a lawyer during this event is to create the sales agreement. Some of the requirements for signing this agreement might include:
- Putting down a deposit – the buyer might have to put a non-refundable deposit down in order to get the deal going.
- Working within a specified time range – the buyer might only have a certain amount of time to secure financing and work out the details.
- Paying for certain things – while you may be responsible to pay for the appraisal and other services, there might be certain things that the buyer will be responsible to pay. One of these is an inspection of the business.
The sales agreement will include the price the buyer is paying for the business, but it will also list everything included in the price. It will list the assets and debts, and it will list all of the contracts that are transferring.
The sales agreement may also include details about:
- Employee information – you may want to ensure that your employees still have jobs after the transfer, and this is something you can include in the sales agreement.
- Warranties – if you plan on offering a warranty of any kind, it must be stated in the agreement.
- Availability of help – there are times when the previous owner of a business agrees to help the new owner take over the business, and this is generally for a specified amount of time; this time period is designed to help the new owner understand the business processes and have a better chance of success.
There are dozens of other things that can also be found in the sales agreement of a business.
Having a lawyer assist you with this will help you ensure that the transaction is handled legally, and it will reduce the amount of risk you have. You can look for a business lawyer or a real estate lawyer to help you with this.