Buying or selling a business can seem like an overwhelming task. There are so many things to keep track of including contracts, filings, and state laws. Everything needs to be filled out correctly and filed in a timely manner to ensure that the sale is legal. However, you will also need to ensure that you are avoiding any potential legal issues or liability in the future. All of the facets of buying or selling a business can be complicated and challenging, which is why having an experienced business attorney in San Francisco on your side can make all the difference. The following are serious aspects to consider when buying or selling a business.

Reason for Sale

If you are selling a business, you should provide a sense of financial security and stability to your new buyer. If you are a buyer of a business, you should seriously question the motives and finances of the business being sold. Always inspect all financial information and tax records. Determine if the business in California is profitable or not, and the true reason the business is being sold. For example, if someone is simply retiring and wanting to sell a profitable business, this would likely make for a sound business decision. However, if you are looking at a business that has had serious deficits in its finances for years, and now the owner is looking to sell, perhaps you should reconsider your business decision. Some questions to ask a seller (or if you are a seller you should be prepared to answer) would include:

• Is the business profitable? How long has the business been profitable?
• Are all taxes paid to date?
• Are all financial records for the past several years available to review?
• Are there any pending lawsuits in court regarding the business?
• Are there any pending investigations from government entities such as the Department of Labor, Internal Revenue Service, etc.?
• Have all required licenses and permits been obtained?
• Will there be any substantial or drastic changes between now and the time of sale?
• Has the business agreed to any pending transactions outside the normal scope of business that would either take a significant amount of money to resolve, or change the outcome of the finances of the business in any way?

As a buyer of a business, you should request all of this information, and as a seller of a business, you should make all of this information available and be as transparent as possible so that you can provide a sense of security to any buyer.

Legal Contracts and Agreements

Whether you are the buyer or seller in this process, you will need to protect your interests through legal contracts and legal filings. Your San Francisco business attorney will be essential here. The following are just a small sample of the types of legal contracts or agreements you may need to include in your negotiations and final sale of the business.

• Promissory notes and security agreements
• Buy and sell agreements
• Non-compete agreements
• State-required filing
• Lease review and lease assignment
• Asset purchase agreements
• Letters of intent
• Closing documents
• Non-disclosure agreements
• Stock purchase agreements