Purchase and Sales of Businesses
Oswald & Mitchell are experienced in representing clients who are interested in purchasing or selling an existing business.
Representing Buyers/Purchasers of a Business
When purchasing a business, clients have a choice of either buying the assets of the business or purchasing the stock of a business. Working closely with the attorney and the accountant are essential to the client for several reasons: maximizing tax benefits, ensuring proper capitalization, and assessing the true value of the assets or business purchased. We work closely with our clients and their accountants to make sure that the purchase transaction adequately protects our clients and places them in the best position for their future success.
Prior to purchasing a business, it is absolutely essential that the attorney does the due diligence required to protect the client. The following is a partial list of the due diligence that must be performed before purchasing a business or the assets of a business:
Obtain and review last 3 to 5 years of business tax returns, balance sheets, budgets, Shareholder equity, Notes to Financial statements, quarterly profit and loss statements,
Review lease agreements for tangible personal property and real property
Review business licenses
Review title to business assets
Perform a uniform commercial code search for any security interests
Review all contracts and agreements
Review all on-going lease or rental agreements
Get a list of all assets owned free and clear by the business
Review status of Selling business
Obtain copies of all employment contracts, noncompetition agreements and confidentiality agreements
Interview suppliers and review all supplier contracts
It is essential that any buyer of a business perform the due diligence required before purchasing a business or the assets of a business. Think of performing the due diligence before purchasing a business as being comparable to having a home and pest inspection done before purchasing a house.
Representing Sellers of a Business
When selling a business, the seller often has a choice between selling the assets of the business or selling the stock of the business. There are certain tax advantages to the Seller depending upon whether the sale is a sale of stock or the sale of assets. Oswald & Mitchell work closely with their clients and their accountants so that the transaction is as favorable as possible to them. When selling a business, the transaction is generally one where the buyer makes payments over time. It is absolutely essential that the attorney work closely with the client to make sure that the due diligence is performed on the potential buyer of the business. The following is a partial list of the due diligence that must be performed before selling business or the assets of a business:
Obtain and review last 3 to 5 years of buyer’s tax returns, balance sheets, etc.
Perform Credit and Criminal Background check on Buyers
Review title to all assets held by Buyer including real estate
Review Loans to Buyer
Review Security interests on buyers assets
Whether the client is selling a business or purchasing a business Oswald & Mitchell have the experience necessary to ensure that our clients are protected, that the transaction is transparent, that our clients are not surprised down the road by anything unexpected in the business sale or purchase and that all of the necessary documents have been drafted and executed so that our clients are protected and are in the best possible position once the transaction has closed.