On this episode of Deal Talk, Jeff Allen interviews Hanwei Cheng, senior Counsel of Ed Lee Law Group PC in Los Angeles. Making the decision to hire an attorney can be a stressful decision for many business owners who are looking to sell their business. This podcast offers advice on how to use an attorney to help with due diligence and how to prevent some major catastrophes as you go through the process of selling a business. Even if you are not looking to hire an attorney, this podcast will open your eyes to some possible problem areas and, hopefully, help you avoid some pitfalls. Here is a sample of what you can expect to hear from this episode:
Jeff: Do I really need an attorney when selling my business?
Hanwei: When it comes to selling their business, a lot of business owners believe they have everything under control. However, as well as they know their business, most business owners do not necessarily have the legal expertise that an attorney does. What attorneys do best is problem solve. We can anticipate certain contingencies that may arise and we try to prevent those before they actually happen. Hiring an attorney from the outset can literally save you thousands of dollars and keep you out of a courtroom. As the saying goes “an ounce of prevention is worth a pound of cure.” Taking a little bit of extra time and money to retain an attorney from the beginning can nip many problems in the bud.
Jeff: I don’t think I need an attorney, things seem to be going good without one.
Hanwei: I can certainly understand that frame of mind. But, an example that comes to mind is going to your Doctor for checkups. Why do we go get annual checkups when we believe we're extremely healthy and have no problems? We want to have that reassurance from a professional that everything is okay and there is nothing going on under the surface that we, those of us who aren’t doctors, just aren’t trained to see. It is kind of the same thing with an attorney, you want to go a “checkup,” and have him or her look over your documents and procedures and make sure everything is OK, so that no problems arise. Maybe your business appears to be running smoothly or the sale transaction seems straight forward, but under the surface there is something you did not catch because you aren’t trained to spot the issues that may arise.
Maybe your business appears to be running smoothly or the sale transaction seems straight forward, but under the surface there is something you did not catch because you aren’t trained to spot the issues that may arise.
Jeff: Do I need a specialized attorney or just a general practitioner?
Hanwei: To piggyback off the previous answer, even though you go to your general doctor for your annual checkup, if you are having trouble seeing, you do to an eye doctor. If you find that you hurt your back, you would find a doctor that can help you with that issue. Same is true for finding an attorney. Because the law is too extensive and there are so many different topics, it is literally impossible for one attorney to be specializing every single area. Think about how many areas of law there are: family law, property law, employment law, tax law, wills and trusts, business law. An even within business law there are so many different areas that encompass that one area. When you are ready to sell your business, you will not want to go see the same attorney who helped you write your will, unless he or she knows about selling a business and all that is involved in that very complicated process.
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