There are many issues that need to be discussed and agreed upon when selling a business, but a lawyer can help. If you are thinking about selling your business, you should speak to a lawyer who can put together all the needed documents and perform other tasks. The following includes some common legal issues you may encounter when selling your business.
How the business is structured or organized will dictate how complicated the sale will be and what issues have to be addressed. If it is merely a sole proprietorship owned and operated by one person, then these transactions are fairly simple. However, the business could be structured as a partnership or a limited liability company.
If it is a partnership or limited liability company with several owners, everyone who is a part owner of the company has to agree to the sale and all terms. Corporate level meetings would have to take place, and a resolution of sale would need to happen, which is where everyone’s vote is recorded.
Every sale of a business should be reviewed by an certified public accountant or business tax specialist so the parties understand the tax consequences of the sellers and the buyers. You should not rely solely on the lawyers handling the drafting of the sales documents. With many complicated business purchases, you may want to have a written certification from an accountant detailing the tax consequences as part of the entire purchase terms.
Due diligence is a legal term that describes the process of researching and investigating every important aspect of a business before and during the purchase process. Usually, the buyer will request information, documents, data, and other things in order to confirm aspects of the business. The information and data will include the following issues:
- Financial books, including receivables, loans, financial obligations, balance sheets, payables, incomes statements, and past tax filings.
- Legal agreements and contracts.
- Information on employees, including any employment contracts, salaries, benefit agreements, union contracts, and potential legal issues, such as wrongful termination or discrimination lawsuits. A lawyer will help you avoid business litigation.
- A current inventory.
- The company’s reputation in the community and business world, including social media posts and campaigns.
- The current advertising campaigns.
- Any environmental issues related to the property that the business owns.
Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Help Clients Who are Selling a Business
Selling a business can be stressful, but we can help. Our Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. can help you avoid legal issues when you are selling your business. We will make sure everything is in order. Call us at 215-574-0600 or complete our online form for an initial consultation. We are located in Philadelphia, and we serve clients throughout Pennsylvania and New Jersey.