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Why You Need an Attorney When Buying a Business


Buying a business is a huge commitment, which you should never take lightly. One of the first ways you can set yourself up to be a success is by enlisting legal guidance to help you through the process of acquisition. Here are a few reasons why you need an attorney when buying a business.

  1. Getting ready: During the beginning process, an attorney can ensure that the business’ documents are all up-to-date to ensure everything goes smoothly. In addition, an attorney can organize the business entity (ex. the new LLC or corporation) that will make the company purchase.
  2. Contract negotiation and drafting: An attorney can help you structure, negotiate and document the terms of the company purchase. Signing this agreement usually is not the end of the transaction; the parties must still complete the financing agreements, due diligence and completion of any ancillary documents.
  3. Financing: Legal help is crucial when dealing with financing. Seller financing, through which the purchaser pays a portion of the purchase price at closing and pays the remainder over a period of time, requires a contract to protect both the buyer and seller.
  4. Due diligence review: An attorney can review relevant documents such as leases, vendor agreements, franchise agreements, employee agreements, and material contracts. A buyer’s attorney typically orders a UCC search to verify there are no liens against the company assets.
  5. Intellectual property transfer: If the business includes valuable copyrights and trademarks, at attorney makes sure the seller actually owns it and transfers it to the buyer.
  6. Closing: Finally, attorney make sure all the documents get signed and money exchanges hands. If there are any ancillary documents, such as a non-compete agreement, the parties sign those as part of the closing.

To learn more about buying a small business, contact our Bristol County business lawyers at Percy Law Group, PC. Call (508) 206-9900 or contact us online today.

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