buying or selling businesses in nj or pa
In a business purchase or sale agreement, the rights and obligations of the buyer and seller are clearly stated. The purchase or sale agreement is a legally binding contract. As your lawyer, we will ensure your rights and interests are fully protected throughout the negotiation of the agreement and upon the merger or acquisition of the business.
Do you need to speak with an attorney regarding a buy-sell agreement? Call The Dhaliwal Law Firm at (609) 447-1201 to schedule a free consultation.
Do you need to speak with an attorney regarding a buy-sell agreement? Call The Dhaliwal Law Firm at (609) 447-1201 to schedule a free consultation.
TYPES OF TRANSACTIONS
Purchases and sales come in many different forms, such as the purchase of an entire business, the purchase of the bulk or a part of a business's assets, a sale of some or all of a corporation's stock, franchise purchases, the merger of two companies, joint ventures, partnerships, a sale with seller financing, and the sale of a business with the seller's continued involvement (such as an employee, consultant or minority owner). The are many variations.
THE WRITTEN AGREEMENT
The contract may be the most important piece of the transaction. A written contract is an absolute necessity. It will set out all the terms of the deal, and the rights and responsibility of the buyer and seller. Negotiating the contract, while often difficult, is the most vital part of the entire transaction. It is important that you have an experienced business attorney on your side to negotiate the contract and ensure its written terms protect you, and that you get what you bargained for in the deal.
The contract will set the purchase price and how it will be paid, what due diligence is provided, which party will be responsible for the seller's liabilities, escrow for tax liabilities or environmental contingencies, confidentiality provisions, contingencies to be completed and remedies for failure to meet the contingencies, and events allowing for cancellation of the transaction. It will provide for financing contingencies. The contract will set out the remedies if one side fails to fulfill its obligations, such as reversion of ownership, retention of the security deposit, arbitration, and the breaching party being responsible for the other side's costs. It will provide for escrows for financial liabilities or environmental cleanup. It also provides for collateral for the purchase price if it is to be paid over time.
A clear, well-written contract will avoid disputes, because business owners and sellers are in business of running their companies and making a profit, not spending their time in litigation. Our business law experience helps us draft contacts to avoid the many pitfalls we have seen.
DUE DILIGENCE
Due diligence is especially important for buyers. The seller knows her business, but the buyer will be coming in cold, with limited knowledge. It is important that the buyer knows exactly what it is paying for. It is also important to the seller. For instance, a seller will want objective benchmarks, so that a due diligence clause does not let the buyer back out merely because of "cold feet." Likewise, the seller will want to know the buyer’s financial ability to meet its obligations. A good due diligence provision will include many items, depending on the nature and location of the business, but most include items such as known or unknown environmental issues which could become major liabilities; good will and reputation. It is important that buyers have the ability to examine the company's books, records and financial statements -- its financial health, its revenue and expenses, current and past; its customer or customer lists; and its inventory, accounts receivable, and accounts payable. Title, lien, tax status and judgment searches must be conducted.
We are experienced and aggressive in helping our clients conduct thorough due diligence.
CLOSING THE DEAL
One of the other important roles for the business attorney is to actually close the deal. The parties entered into a contract because they believed that the transaction was in their best interest. Assuming that due diligence does not reveal a major "red flag" (for example, significant environmental contamination, "doctored" books, or the buyer's inability to make payments), the parties want to close the deal. It is the attorney's job to resolve the issues that arise in negotiations and due diligence and shepherd the deal to closing if it is still in their client's interest. Our business law firm is focused on both protecting our clients and closing the deal if it is their best interests.
RELATED LEGAL ISSUES
Many other legal services are often required in the purchase or sale of a business, and our New Jersey and Pennsylvania transactional law firm routinely handle these for our clients. For example, it may be necessary to form new business entities. Financing needs to be negotiated and financing agreements need to be drafted and revised. Partnership, shareholder, and LLC operating agreements often need to be drafted. Employment matters such as preparing employment agreements and employee handbooks must be written and reviewed. Standard customer contracts and vendor contracts must be prepared.
Our New Jersey and Pennsylvania business transaction law firm is experienced in representing buyers and sellers in the purchase and sale of businesses or their assets. To find out how we can help, e-mail us or call (609) 447-1201.
Purchases and sales come in many different forms, such as the purchase of an entire business, the purchase of the bulk or a part of a business's assets, a sale of some or all of a corporation's stock, franchise purchases, the merger of two companies, joint ventures, partnerships, a sale with seller financing, and the sale of a business with the seller's continued involvement (such as an employee, consultant or minority owner). The are many variations.
THE WRITTEN AGREEMENT
The contract may be the most important piece of the transaction. A written contract is an absolute necessity. It will set out all the terms of the deal, and the rights and responsibility of the buyer and seller. Negotiating the contract, while often difficult, is the most vital part of the entire transaction. It is important that you have an experienced business attorney on your side to negotiate the contract and ensure its written terms protect you, and that you get what you bargained for in the deal.
The contract will set the purchase price and how it will be paid, what due diligence is provided, which party will be responsible for the seller's liabilities, escrow for tax liabilities or environmental contingencies, confidentiality provisions, contingencies to be completed and remedies for failure to meet the contingencies, and events allowing for cancellation of the transaction. It will provide for financing contingencies. The contract will set out the remedies if one side fails to fulfill its obligations, such as reversion of ownership, retention of the security deposit, arbitration, and the breaching party being responsible for the other side's costs. It will provide for escrows for financial liabilities or environmental cleanup. It also provides for collateral for the purchase price if it is to be paid over time.
A clear, well-written contract will avoid disputes, because business owners and sellers are in business of running their companies and making a profit, not spending their time in litigation. Our business law experience helps us draft contacts to avoid the many pitfalls we have seen.
DUE DILIGENCE
Due diligence is especially important for buyers. The seller knows her business, but the buyer will be coming in cold, with limited knowledge. It is important that the buyer knows exactly what it is paying for. It is also important to the seller. For instance, a seller will want objective benchmarks, so that a due diligence clause does not let the buyer back out merely because of "cold feet." Likewise, the seller will want to know the buyer’s financial ability to meet its obligations. A good due diligence provision will include many items, depending on the nature and location of the business, but most include items such as known or unknown environmental issues which could become major liabilities; good will and reputation. It is important that buyers have the ability to examine the company's books, records and financial statements -- its financial health, its revenue and expenses, current and past; its customer or customer lists; and its inventory, accounts receivable, and accounts payable. Title, lien, tax status and judgment searches must be conducted.
We are experienced and aggressive in helping our clients conduct thorough due diligence.
CLOSING THE DEAL
One of the other important roles for the business attorney is to actually close the deal. The parties entered into a contract because they believed that the transaction was in their best interest. Assuming that due diligence does not reveal a major "red flag" (for example, significant environmental contamination, "doctored" books, or the buyer's inability to make payments), the parties want to close the deal. It is the attorney's job to resolve the issues that arise in negotiations and due diligence and shepherd the deal to closing if it is still in their client's interest. Our business law firm is focused on both protecting our clients and closing the deal if it is their best interests.
RELATED LEGAL ISSUES
Many other legal services are often required in the purchase or sale of a business, and our New Jersey and Pennsylvania transactional law firm routinely handle these for our clients. For example, it may be necessary to form new business entities. Financing needs to be negotiated and financing agreements need to be drafted and revised. Partnership, shareholder, and LLC operating agreements often need to be drafted. Employment matters such as preparing employment agreements and employee handbooks must be written and reviewed. Standard customer contracts and vendor contracts must be prepared.
Our New Jersey and Pennsylvania business transaction law firm is experienced in representing buyers and sellers in the purchase and sale of businesses or their assets. To find out how we can help, e-mail us or call (609) 447-1201.