BUYING A BUSINESS
For some, buying an existing business may be preferable to starting a new business from the ground up. In other instances, after building a business up, the owner may want to sell it to be free to create another, retire, or explore other opportunities the business now affords. Under any circumstance, it is important for both the buyer and the seller of a business to carefully review the business and its assets, liabilities, and revenue streams prior to completing the sale.
When purchasing a business, items that will ensure the business remains an ongoing concern, and revenue streams are maintained, are of primary import. Properly documenting the transfer of client lists, Goodwill, proper transfer of intellectual property necessary to continuing operations, marketing and advertising channels such as the business phone number and domain address, assets, tangible and intangible property, open litigation or threaten litigation matters, open tax matters, and a host of other concerns should be represented in the final documentation of your agreement.
Within that documentation, an experienced attorney can also help you ascertain whether or not each of those items is, in fact, transferable to a new owner and at what cost. Frequently, upon transfer, the financial concerns may be adjusted to the point the original profit and loss statements are no longer relevant or accurate as to how profitable the entity actually will be, going forward. The existing lease for that particular location may not be transferable, or if it is, may require many years of past financial records just to submit it for approval. Each of these concerns can contribute additional fees and costs to the overall cost of the business.
An important initial consideration should be whether to purchase the business via an Asset Purchase Agreement or a Stock Sale. Does the new owner want just the assets or do they want all of the underlying company concerns, liabilities, any pending litigation, online reviews, name, Goodwill, and everything that goes with it or not. Each of these two types of purchase have a host of costs and benefits that accompany them and from business to business, those elements can shift considerably.
Once acquired, depending on the type of purchase, which business form might be the best for the underlying entity, a limited liability company, a corporation, or an alternate selection? Colorado law is quite competitive and offers a fairly wide selection from which to choose your business entity, each with its own inherent benefits.
Experienced Denver business attorney Susan Larsen, with a sound educational and experienced background in the various aspects of business, can help you whether you’re buying or selling a business. Susan can help you negotiate the price, assist with the assignments of leases and other agreements, detail requisite representations and warranties of both the buyer and seller, and fully detail what is, and what is not, including all assets and liabilities, and address any pre-sale items that must be resolved before closing can occur.
If you would like to schedule a consultation with Susan Larsen, please call (303) 520-6030.