What Things Should I Consider Prior To Selling Or Purchasing A Business?
The first thing you need to consider in purchasing or selling a business are the potential tax consequences if you go through with the transaction. I would, as the business attorney, conference call the client and their CPA because with the new tax laws, there are new requirements that were not there just a few years ago. The sale of a corporation could have catastrophic results, if not done with an eye on IRS requirements. Anyone who is looking at purchasing or selling businesses must use an attorney. It would be financial suicide not to.
How Long Does It Generally Take To Go Through The Process Of Buying Or Selling A Business?
The business transactions I typically handle are closed corporations, meaning they’re not on a publicly traded exchange and they’re small businesses with sales of typically less than $10,000,000. Typically, they take 30 to 60 days, but they could take longer if there are multiple partners who have diverse interests. The seller also should meet with their CPA and go over the valuation or potential valuation before they ever list the business for sale.
What Questions Should Clients Ask A Business Attorney When Buying Or Selling A Business?
The first question to ask is how long the process will take. Other questions would include whether to take monthly payments, what due diligence is required, and whether a separate agreement is required in order to remain a consultant. You should also ask about the attorney’s fees. The only way to ensure that your transaction is a success is by working with a competent attorney and the fees may reflect that.
Do You Have To Advise Your Employees If You Are Selling A Business?
You do not have to advise your employees if you are selling your business. It is not advisable to discuss anything until a contract is signed. Once a contract is signed, it depends on the contract itself. If you are selling a restaurant and the new owner is going to replace everyone, you may want to give everyone notice that the restaurant is being sold. At the same time, if the potential owner wants to keep staff, you may want to announce that the restaurant being sold, but that everyone is going to be retained. It depends on the type of transaction.
For more information on Buying And/or Selling A Business In New York, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (212) 748-9477 today.
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