Buying an established business is often less risky and more rewarding than starting a business from scratch. However, when you purchase a business, there are several things that you need to know before you make a commitment.
There are many types of business law that affect an acquisition. First, you may need to secure the licenses and permits that you need to operate. These will vary depending on the type of business that you are operating. There are also zoning laws that you may need to comply with. The specifics of business law can vary widely by state.
Many business owners choose to protect themselves by working with a qualified attorney who specializes in acquiring or starting businesses. Although hiring a business law attorney involves upfront costs, most people find that it is worth the investment. The lawyer can guide you through the acquisition process and ensure that your interests are thoroughly protected.
There are many aspects of business law that prospective owners aren’t aware of. They can easily make mistakes during the acquisition process. A letter of intent must be written up front. It includes several details such as the proposed purchase price, the terms of the agreement and the conditions of the sale.
The transaction will also involve other legal documents that an attorney will fully understand and help you understand. These include confidentiality agreements, contracts and leases. A buyer should examine the existing business’ financial statements to ensure that the company is viable. In some cases, a lawyer will recommend that you request an audit letter from a reputable CPA firm.
An attorney experienced in business law should help you review the documents required for the sale. In addition to the previously mentioned documents, you will also have to investigate tax returns, property documents, customer records, advertising materials and the company’s past sales records. You should also examine information on contracts that involve employees and managers.
You can investigate many of the necessary documents on your own but unless you have a thorough understanding of business law, you could easily overlook important details. This could cause significant problems down the road. Investing in a good business law attorney will likely save you money and headaches in the long run.