The Role of Attorney’s in the Sale or Purchase of a Business

Attorneys can be an invaluable asset to have when one is in the middle of business transaction. The unique development of acquiring a new business, franchise or chain or even selling an older business can be a tedious procedure. An attorney will act as a facilitator of documentation and a witness to all of the activity taking place during the initial contractual agreement process. The right attorney will ensure that each party involved in the transaction has all of their necessary paperwork before proceeding with the process at hand. The attorney or team of lawyers will make each party involved aware of any or all rights that they are signing away in this business deal . And finally, they will review and prepare any and all documents needed to complete this transaction.

These documents could be original business contracts, distribution of monetary funds, bank account information, or private shareholder account documentation.  All of the appropriate information will be examined before, during and after the final signature is drawn. Business transactions of such large proportions can be stressful to take on alone, it is essential to employ an experienced attorney to help who has an extensive background in buying and selling.

So How Can an Attorney Help You?

There are several strategies that are implemented by lawyers and attorneys who are known for their extensive knowledge in this field. Choosing the right business transaction attorney to help you sell or purchase a business will not only ensure success for both parties, employing an expert will show the other party that you take this transaction seriously and want to success down the line. Requesting a lawyer to be present during such major transactions adds value, credibility and an effective contingency plan if there are any issues that arise when the transaction is coming to an end.

How to Hire the Right Lawyer for Your Sales Transaction

Years of blood, sweat and tears have been put into your business. The late nights and early mornings and all of the hard work has contributed to your overall success. It would be extremely unfortunate for all of that hard work and determination to be wasted by employing an attorney who has little knowledge and experience in the field of business transactions.

The same amount of research and dedication you exert toward your business you should also use to find the right attorney who will help you with any and all of your needs during this process. The legal team or attorney that you select should have an extensive knowledge in the field of purchasing and selling organizations, and not limited to experience with buying and selling agreements, shareholder contracts, Intra-family sales and other contractual agreements that will be transferred, yet remain in the family succession.

Examples of Buying and Selling Contractual Agreements

Buying and Selling Agreements:

Buying and selling agreements are essentially a “Plan B” or contingency plan that is set in place if there is an unfortunate incident that befalls the business owner such as death or incompetency. This contract acts as a form of insurance that essentially protects the ownership and succession of the business to a suitable new owner. Regardless of whether the new owner is a family member, new buyer or a selected shareholder. This contract protects all parties that are involved in the transaction.

Shareholder Agreements:

A shareholder agreement acts an alternate form of insurance that protects the business and all of its shareholders that are involved in the organization or company. It provides a sufficient amount of discretion to protect the company from unwanted publicity when it comes to affairs affecting the responsibilities and ownership of the shareholders.

Intra-Family Sales:

An intra-family sale is the distribution of a business, company or organization to the next heir or in the line of succession of ownership in the family. It is imperative to have an attorney present when conducting this form of transaction since there are many technicalities involved in the process. Transferring documentation, applicable certification, and revised signatures that might be needed.

Sales to Intentionally Defective Grantor Trusts:

Sales to intentionally defective grantor trusts is one of the most complicated and tedious aspects of the sales process in a business transaction. This part of the transaction process essentially secures the final touches of physical and tangible assets to the rightful owner. This aspect of the buying/selling process is very exhaustive and it would be ill-advised to continue with a transfer of this size without the presence of an attorney or a strong legal team.

What Are the Risks of Not Employing an Attorney?

Some business owners and potential business investors would prefer to handle all matters of buying, sales and other transactions in-house and without the presence of a legal team or skilled attorney. Here are the risks of completing a transaction with an attorney:

1. No reliable witness to relay the events that took place.
2. Total lack of fact checking for documentation and allocation of monetary funds and other assets both tangible and intangible.
3. No contingency plan for the assets in question  if the plan falls through.

Business transactions can get very technical, the procedure of selling, buying or transferring a business is hard enough to complete without any assistance. Just imagine how difficult this process could be to complete without an experienced attorney or legal team by your side. These experts are there to help you navigate through the process of preparing paperwork, eliminating unnecessary stress.

And even more important, acting as a witness in the final stage of the transaction in case there are problems that arise.  By hiring the right lawyer to help you through the process of acquiring or selling an organization, you are protecting yourself, every assets in question and the new owners of the business. And finally, the attorney will help you to establish credibility, as buyer or seller . By placing the experts in charge of a buying or selling transaction. This will send a message to the public and project an aura of pride, and overall appeal that the individuals involved in this transaction care about their business and their customer base. See more visit: Heller Espenkotter.