Buying and or Selling a Business Checklist
Hi! My name is Andy Gale.
I’m a small business attorney. One of the more routine matters that comes up in my practice is dealing with clients who are interested in either buying or selling a business. One of the more common questions that comes up is, “what’s the first step in the process?” In order to help my clients conceptualize and understand the process sort of from that 10,000-foot level, what we’ve done is we’ve created an infographic, which we’re going to go through here in just a second. It helps our clients understand what the flow is going to be for the actual transition of the business from one person to another. So let’s just dig in and we’ll just take the first few steps now.
Checklist of Buying and or Selling a Small Business
When it comes to buying or selling a business, the entire checklist breaks down into essentially three main parts.
The first part is the location of the business, the negotiation of the material terms, and the drafting of a purchase agreement.
The second is the phase is what we call the pre-closing phase. That’s where once we’ve got a purchase agreement, the agreement is sent over to ESCROW, and the ESCROW is opened. And the parties go through their due diligence process. And then finally once the contract is negotiated, once the due diligence is completed, and once the closing occurs that is that the business is exchanged for the cash.
Then we get into the final phase, which is post-closing obligations. A lot of times when a business is sold, once the deal happens, there are still ongoing obligations of both the seller and the buyer.
When Should a Small Business Engage with a Corporate Lawyer?
So I have clients at this point that say, “Okay, Andy. I really do understand the process. It seems incredibly complicated. When is the best time for us to engage a business attorney like you?” And my advice always is, “You want to do it as soon as you possible can.” So in this particular flow, what you’d want to do is locate the business. Make sure that this is the business that you want to buy and/or this is the person you want to sell the business to. After you’ve made that first step and you’ve started to lay out from a business standpoint what the terms of the transaction are going to be that’s where you engage your small business attorney. So you need help walking through this process or really understanding it in a little bit more depth, we’re here to help you. We specialize in helping small business owners either buy or sell businesses, and then help them with their formation of appropriate business entity to make sure they get the maximum tax benefits, make sure they get the maximum liability protection.
My name is Andy Gale. Thank you!
See the video and infographic about “Buying and or Selling an Orange County Business