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Business Attorney | Law Office of Maritza S. Nelson, LLC
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  • Home
  • Who We Serve
  • Practice Areas and Fees
    • General Counsel Service
    • Business Law >
      • LLC Formation
      • LLC Operating Agreements
      • Close Corporation Formation
      • Corporate Bylaws
      • Close Corporation Agreements
      • Other Business Law Services
    • Business Contracts >
      • B2B Service Agreements
      • Contract Review and Advice
      • Customer Agreements
      • Financial Agreements
      • Joint Venture Agreements
      • Lease Agreements
      • Noncompete Agreements
      • Nondisclosure Agreements
      • Waiver and Release Agreements
      • Website Privacy Policies
      • Website Terms of Service
    • Business Sales >
      • Business Purchases and Sales
      • Letter of Intent
      • Purchase Agreements
      • Buy-Sell Agreements
      • Membership Interest Transfer Agreements
      • Business Succession & Disaster Planning
      • Business Dissolutions
    • Raising Money From Investors >
      • Private Placement Memorandums
      • Investment Agreements
    • Franchising and Business Opportunities >
      • Franchise Disclosure Documents
      • Franchise Agreements
      • Ohio Business Opportunity Plans
    • Nonprofit Law >
      • Nonprofit Formation
      • Co-op Formation
      • Tax Exempt Status
      • Nonprofit Governance
      • Nonprofit MOUs and Agreements
      • Nonprofit General Counsel Service
    • Intellectual Property >
      • Trademark Search
      • Trademark Registration
      • Trademark Maintenance
      • Copyright Registration
      • Work For Hire Agreement
      • Licensing Intellectual Property
      • Assigning Intellectual Property
      • Proprietary Information and Invention Assignment Agreements
      • Confidentiality Agreements
      • Intellectual Property Audit
    • Employment Law >
      • Employment Contracts
      • Employee Handbooks
      • Employment Policies
      • Independent Contractors
  • Adding Value
    • Legal Audit Checklist
    • Legal Dictionary
    • 7 Common Legal Mistakes
    • Succession and Emergency Planning Worksheet
    • Business Contracts: Review Checklist
    • Webinars >
      • HR 101: Managing the Growing Pains That Come With Growing Your Business
      • Hiring Independent Contractors
      • Legal Audit and Risk Assessment
      • Structuring a Social Enterprise
  • Bio
  • Blog
  • Scheduling
    • Prospective Client Scheduling
    • Existing and Former Client Scheduling
    • Networking Scheduling

Business Purchases and Sales ​Columbus Ohio

Business Purchases and Sales

Purchase or Sale     
   Representation
Letters of Intent
Purchase Agreements
Buy-Sell Agreements
Membership Interest
   Transfer Agreements

Business Succession &
   Disaster Planning

Business Dissolutions
Other Business Sale 
​   Services

​
Buying or selling a business, or even a share of a business, is a complex transaction that requires sophisticated legal counsel. Whether it's time for one of your business partners to move on or you're buying or selling the entire business, we can help you get your money's worth, negotiate all the little details, and minimize the legal risks.
​​
Are you getting everything you think you're supposed to get with the purchase? So many business assets are "intangible."

As a buyer, how do you minimize the risks you might be exposed to if the seller hasn't been entirely forthcoming about the business?

As a seller, how do you make sure the buyer doesn't come back and blame you if they're not as successful as they had hoped?

You've figured out the basic terms of the deal, but now the other side has presented an extensive purchase agreement with so many "little details" you had never even considered. How do you negotiate these details? Which ones really matter?

You've worked hard to build your business. Are you really getting what the business is worth? 

Or, you're buying a business. Is it really worth the price the seller is asking?

With so many people potentially involved (employees, vendors, attorneys, accountants, etc.), how you do ensure a smooth transition?
What steps are involved in buying or selling an existing business?
Once you have found a business that you are interested in purchasing (or a buyer interested in purchasing your existing business), there are still a number of steps that have to happen before the deal closes. Even when prospective clients think they’ve worked out all of the key terms of the deal, there are usually numerous fine details to negotiate before everything is truly done. 

1.  Agree on a purchase price. While the parties can spend the money on a formal business valuation, the expense may be overkill in some business situations. A formal valuation will cost at least a few thousand dollars. In some situations, that may be money well spent, but often, specific factors are driving the sale of the business, i.e., the seller’s desire to retire or the buyer’s desire to expand an existing business through acquisitions. Factors like these will have a much greater effect on negotiating a purchase price than any formal valuation report. At the end of the day, the only number that matters is what the buyer is willing to pay and what the seller is willing to accept. Read more: Five Things to Consider Long Before Selling Your Business

2.  Optional: Submit a Letter of Intent. 

3.  Complete due diligence. Due diligence typically refers to the buyer's investigation of the business or assets that are being purchased. This often includes a review of the seller’s financial statements and key contracts, checking for liens on the assets or other litigation that might impact the business’s prospects, making sure the business has the required permits or licenses to operate, confirming that intellectual property is registered to the business and the related rights will be enforceable, reviewing employment-related information for key employees and contractors, and obtaining any other information the buyer needs to feel confident in moving forward with the deal. 

4.  Negotiate and draft the Business Purchase Agreement. 

5.  If necessary, working with the buyer’s bank to finalize bank financing. Alternatively, if the seller is financing the deal, then the seller will likely insist on various ancillary documents to secure any amounts owed to the seller. 

6.  Prepare related ancillary agreements. Depending on the terms of the deal, how it’s being structured, and whether new business entities are being created, the final deal will likely involve more documents than just the purchase agreement. Common ancillary agreements include: 
  • Bill of Sale and Assignment Agreement: This relatively brief agreement confirms that the assets covered by the purchase agreement and the purchase price (or initial payment) did in fact exchange hands. Think of it like a very formal receipt. 
  • Escrow Agreements: Most often used in real estate transactions, these agreements typically confirm that a down payment has been deposited into an escrow account and under what circumstances the down payment may be returned to the buyer. 
  • Non-Disclosure/Non-Compete Agreements: A Non-Disclosure Agreement may be required early in the negotiation process before the seller will provide confidential information about the business to a potential buyer. On the other hand, the buyer will typically ask the seller to sign a Non-Compete Agreement so that the seller doesn’t start a competing business and simply take all of their former customers or clients down the street. (This can also be incorporated directly into the purchase agreement, along with a non-solicitation provision.)
  • Personal Guarantees: If the buyer is a business entity, the seller may require the individuals who own the business entity to personally guarantee any amounts due to the seller or other legal obligations of the buyer. 
  • Security Agreements: If the seller is providing financing for the deal, they will often take a security interest in the assets to ensure the buyer meets their payment obligations. If done properly, the seller will have a lien on the buyer’s assets until the underlying loan is repaid in full. 
  • Service or Transition Agreements: These agreements are used to document what obligations the seller has to assist with the transition of the business or its assets to the buyer and whether or not the seller will be provided additional compensation for such services. 

In addition, new business entities may need to be formed, and if the purchase involves a franchise, then franchise disclosure documents and agreements will need to be reviewed as well. 

7.  Finally, close the deal. Agreements are signed, the purchase price (or at least an initial payment exchanges hands), and assets/stocks/membership interests are exchanged. ​
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Complete Purchase or Sale or Merger Representation includes:
  • Attorney advice and recommendations;
  • Offer letters, letters of intent, or memoranda of understanding;
  • Purchase or merger agreement;
  • Certain ancillary documents: bill of sale and assignment, escrow, guarantee, mortgage, nondisclosure / noncompete, promissory note, security agreement, service agreement with founders/sellers; and
  • Negotiations and revisions​
Flat Fee: 
  • ​5+ Key Parties: $13,575
  • 4 Key Parties: $8,325
  • 2 to 3 Key Parties: $4,775
Key Parties include: each member/shareholder of the buyer and seller, banks, opposing counsel, brokers, realtors, etc.
Exclusions: 
  • ​Forming a new business entity
  • Preparing/revising company operating agreements ​
  • Reviewing franchise disclosure documents and agreements

Alternative Retainer Option: $4,000
Business purchase/sale and merger transactions can be difficult to predict because of the complexity of these deals. Some transactions involve multiple third parties, i.e. banks, vendors, or customers, whose approval may be required before the transaction can close. And because every deal is different, different ancillary documents are required--what documents should be prepared in one transaction may be completely unnecessary in another. Because of this, hourly billing is sometimes a more cost-effective option for business purchase / sale / merger representation. 
​Depending on the complexity of the deal, you should budget at least $4 - 11k.
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Additional Resources:

Before you doctor up another contract you found online, waste your money on one of those DIY forms, or sign whatever is put in front of you, get a free review checklist. Then decide whether that contract is really worth the paper it's written on.
Contract Review Checklist
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Learn More About Business Contracts
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All fees and services described on this site are for information purposes only and are subject to change at any time. Until we have both a signed Engagement Agreement and your initial payment, the Firm reserves the right to quote you a new or different fee for services based on the unique legal needs of your business.

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