Woodbridge Attorney

Business Sales and Purchases

Many of our business law clients have gotten into their businesses by buying an established business. Many of our clients (sometimes the same ones) have sold their businesses. The purchase and sale of a business can be complicated; a number of things need to be thought out in advance if the purchase or sale is to be successful.

A key issue in the purchase or sale of a business is the price. Although we are not accountants at Rice & Stallknecht, P.C., and do not offer accounting services, we frequently assist clients in obtaining professional assistance, typically from an accountant, in deciding what a business is worth.

One important issue is often whether the sale will be an “asset sale” in which the assets of a corporation or limited liability company are sold, but the corporation or company does not change hands, or a “stock sale” or “membership interest sale,” in which the entire corporation or company changes hands. While the end result can be about the same, the business has a new owner, selecting which of these will be used is an important part of planning for a sale. Generally speaking, an asset sale is more complicated, since a lot of things are changing hands, but it can provide valuable protection to the buyer against liabilities of the selling company. A stock or membership interest sale may have significant tax advantages to a seller. We work with both buyers and sellers, often teaming with their accountants, to determine which approach will be best for a particular business purchase or sale.

Once the price has been established, we frequently assist clients with financing. Many small businesses are sold with owner financing. While this can work well, it needs to be carefully documented and different ways of securing the transaction should be considered.
Bank financing, including Small Business Administration financing may also be an option. We have a great deal of experience helping clients with this sort of financing, which can be very complicated and involve many lender imposed requirements. Getting through these requirements promptly and efficiently can be the key to a successful transaction.

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