Are you selling your business? Are you acquiring a business? Either way, you may wonder, “Should a lawyer review my business purchase agreement?” The short answer is yes. Below, our Modesto business lawyers explain 3 reasons why you should have a lawyer review your purchase of business agreement.
What Is a Business Purchase Agreement?
Many legal documents go into the sale or acquisition of a business. A business purchase agreement, also known as a sale of business contract or a purchase of business agreement, transfers business ownership from the seller to the buyer.
3 Reasons Why a Lawyer Should Review Your Business Purchase Agreement
Whether you are selling your business or purchasing one, we recommend that you have an experienced business transaction lawyer help you with the agreement. When you take part in a business transaction, you must navigate complicated areas of law. Our Modesto business transaction lawyers discuss three reasons to consult with an attorney below:
#1: Get a True Understanding of the Value of the Business
An experienced business transaction attorney can help you understand the true value of the business. If you are purchasing a business, then you want to ensure that you understand exactly what you are purchasing. The contract should include every item included in the sale, including assets and liabilities. For example, listed assets may include, but are not limited to:
- Physical assets, such as a brick and mortar or inventory
- Trademarks and/or other intellectual property
- Trade secrets
- Brand assets, such as the business name, logo and website
Debts should also be listed, such as loans or payroll.
Working with an attorney is just as important if you are selling your business. You want to ensure your interests are protected. Are you selling your company for a fair price? What are the terms of the sale? How will you be paid, and when? These conditions should be laid out in the purchase agreement.
#2: Protect Each Party From Liability
It is important that each party discloses important financial information that may affect the transaction. Disclosing accurate information can protect the buyer from business liabilities with the purchase. It can also protect the seller. For example, it may prevent the seller from dealing with a buyer with poor credit issues.
Each party should disclose information about any debts, fines, lawsuits or legal obligations. An experienced lawyer can ensure that each party provides accurate and complete financial information for the deal.
#3: Know What You Are Signing
Selling or purchasing a business is a complicated process. There is a lot to consider, including local laws, to ensure that each party is protected and the transaction is legally binding.
If you are selling your business, an experienced business transaction lawyer can help you with every step of the process. Your lawyer can work with other professionals, such as your accountant, to get a true value of your company. Then, your lawyer can draft the purchase agreement with your best interests in mind, as well as in a positive way to potential buyers. Your lawyer will ensure that the transaction is legally-binding and will hold up in a court of law.
If you are purchasing a business, a lawyer experienced in business transactions can help you to understand the terms and conditions of the contract. Your lawyer can review the terms, ensure that your interests are protected, and negotiate terms on your behalf if necessary.
Contact Swingle, Van Egmond & Heitlinger Today
If you are buying or selling a business, reach out to Swingle, Van Egmond & Heitlinger today. We have decades of experience handling business transactions of all sizes. We can help you feel confident about your business decisions. Call us at (209) 522-2211 or contact us online to schedule a consultation. We provide in-person and virtual consultations.