business acquisition
Navigating Business Acquisitions: Key Legal Insights
Buying a business involves a complex process with distinct phases: preliminary negotiations requiring NDAs and high-level financial reviews, a strategic letter of intent (LOI) to address deal-breakers early, thorough due diligence covering legal, financial, operational, and customer aspects, finalizing purchase agreements with auxiliary documents like disclosure schedules, and post-closing management of financial adjustments and transition services. Each phase is critical to ensuring a successful transaction.
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Business Acquisition: Key Takeaways
Part 2 on buying a business. In this part of the series, the buyer reflects on his unsuccessful quest to purchase a small existing company. He shares some suggestions for how to increase the chances of buying a business. He suggests dealing directly with sellers rather than brokers, setting up funding early, and seeking mentorship instead of paying for promises of success. Ultimately, this buyer did not purchase a business due to mismatches between his criteria and available options in his price range.
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Buying a Business: Challenges Abound
Trying to acquire an existing business is not a sport for the short-winded. This is the first part of a two-part article on the challenges of buying a small business. I represented a prospective buyer for eighteen months, before he decided to give up the hunt. This article highlights key lessons learned from his experiences and observations about business acquisitions. The buyer's journey to acquire an existing business faced numerous challenges that ultimately derailed his efforts. This part of the article details the criteria that the buyer used to search for an existing small business: a business priced between $1-2 million that met criteria around risk, growth potential, transferability, and documentation.
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Sale of a Business: Goodwill
If you are buying a small business, the price that you are willing to pay is usually more than book value. The premium associated with the purchase price over the assets is generally considered the goodwill of the company. The amount of goodwill may affect the tax burden on the buyer and seller. It may also influence the ability of the seller to compete after the transaction. This article discusses goodwill in sales of small businesses.
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Selling a Small Business: Not as Easy as you Thought
Checklist for selling or buying a small business: Starting a business is relatively simple, especially if you have worked with a startup lawyer. Selling your small business, however, may be more challenging than you anticipated. Forming a new business is not challenging. You can form a business just as quickly as you ask your small business lawyer to file the papers with the corporations department or in Washington DC with the Department of Consumer and Regulatory Affairs. Selling a business is a lot more challenging than forming a business. There may be many reasons to exit and you now want to receive the full value (value is in the eye of the beholder of course) of the company that you started. You will need the services of your business advisers, your tax advisers and of course your mergers and acquisitions…
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