Few events in business life rival the challenge and reward of buying or selling a business. Following are some practical observations about the legal landscape that every businessperson should know before venturing, as either buyer or seller, into this exciting, but often unfamiliar, territory. Below is one of the first things that every businessperson should know: 1. First, Run the Numbers. Speaking of taxes, because the tax bites of the two different structures vary widely -- an asset sale by a C corporation with its potential “double tax” ... Read More »
Things Every Businessperson Should Know Before Buying or Selling a Business
Another Thing to Know When Buying or Selling a Business
In an earlier blog we started our list of Things Every Businessperson Should Know Before Buying or Selling a Business. That first item was “No Pig in a Poke”. Here is the second one to keep in mind: 2. Power of the Pen. Common acquisition etiquette is for the buyer to draft all the purchase documents and for sellers to draft all the debt documents like notes and security agreements. This is because the buyer must live with the business going forward, while the seller is focused on getting paid among other things. Buyers, for various reasons, ... Read More »
A Third Thing to Know When You are Buying or Selling a Business
In earlier blogs we started our list of Things Every Businessperson Should Know Before Buying or Selling a Business. That first item was “No Pig in a Poke” and the second item was “Power of the Pen”. Here is the third one to keep in mind: 3. Separating Wheat from Chaff. Fundamentally, acquisitions take the form of either a stock sale (either directly or by merger) or an asset sale. And fundamentally, the seller receives either cash or property (i.e., stock), or some combination. Everything else is a variation -- sometimes complex -- on one ... Read More »