In many cases, an individual planning to buy or sell a business may be hesitant to engage a lawyer because he or she thinks it will be too expensive or does not want a lawyer to “throw cold water” on a potential deal. After all, the sale process can be very exciting for both sides, and in an ideal world we could all do business on a handshake without consequence. The reality, however, is that buying or selling your business may be one of the most important economic transactions of your life, and the other side may not be playing fair. Even in the most basic of transactions, and even when neither side has any nefarious intent, there are many legal issues to consider, and there are a lot of things that can go terribly wrong. In fact, a large part of our firm’s litigation practice is dedicated to the representation of buyers and sellers in lawsuits arising from business sales. In most of those cases, the litigants did not have legal counsel during the sale, or did not have competent legal counsel.
We understand that buying a business is an exciting prospect and we take care not to dampen that spirit. At the same time, we must assure as much as possible that our client receives the promised assets and business, without assuming unanticipated liabilities of the seller after the sale. We help our client investigate the legal and financial condition of the business being acquired. We review the seller’s assets and contractual obligations and help our client verify that the seller’s representations about the business are accurate. We prepare sale documents that legally transfer business ownership while at the same time limiting the buyer’s responsibility for pre-existing liabilities of the business. While we cannot eliminate all of the risks involved in buying a particular business, we take great care to identify those risks to our clients and to minimize those risks when possible.
When representing a seller, our job is to facilitate the sale and assure as much as possible that our client receives the purchase price, achieves a clean break from the business, and eliminates (or at least limits) any contingent liability after the sale. We find that sellers are often eager to “get out” and “get paid”, but may not carefully consider the risks attendant to the sale. We work with the client and his or her financial advisors to structure the deal. We make sure that the client is adequately secured in the event that a portion of the purchase price will be paid after the sale. We help the client obtain approval of the sale from any third parties that have standing to object (such as banks, landlords and secured creditors). We also provide general assistance with respect to transition issues, such as notifying employees and customers/clients of the sale in a way that does not damage the business.
These are just short list of potential mistakes that buyers and sellers can make when purchasing a business. Each transaction has its own unique set of potential pitfalls that simply cannot be addressed in a standard form document found on the internet or provided by a business broker that will receive a commission from the sale.
The total legal fees that a client can expect to spend in connection with a buy/sell transaction depends on a variety of factors, including the complexity of the deal and the stage of the deal at the time legal counsel is retained. Gross & Romanick, P.C. endeavors to provide high-quality legal services at reasonable rates. Our attorneys will give you an estimate of the total fees you can expect to spend at the first consultation. In some cases, we will quote a fixed, flat fee to handle the entire transaction from start to finish. Do not hesitate to ask us about that option.