Attorney Interviews

Ekaterina: Pending litigation is not necessarily a legal obstacle in this type of transaction. If a business is organized as a legal entity ( corporation , LLC or other), then it is separate from its owners and the business can be transferred in spite of pending litigation. In this instance, the owner is not the subject of the litigation, the company is. An easy way to understand this is to think about a company that is publicly traded (i.e. Apple, Microsoft or IBM). Each person that owns stock in that company is an owner of the company. Each owner can then sell their stock regardless of what litigation is pending. This does not mean that it will not affect the transaction. A savvy buyer will ask about any pending litigation at the “due process” phase of the acquisition . The seller has a legal obligation to disclose, and not doing...

Royce: The starting point for each transaction is identifying your goals. Once you have identified what you want and require it becomes much easier for your attorney and the rest of your team to structure the deal and help guide the transaction in the right direction. For instance, if you are selling the company because you want to relocate and start a similar business elsewhere, this is an important goal to share with your counsel so he or she can be congnizant of that goal when reviwing non-compete provisions that are often an intrigal part of a buy/sell agreement. As a matter of contract, you must accurately disclose the level of information you have agreed to disclose.

Jamie: I would suggest that you hire an attorney, and possibly a business broker to find a buyer. Of course, the broker will charge you a commission, but they have the connections to find you a buyer. From a legal aspect, it is important to have a lawyer lined up in order to make sure paperwork is in order, and everything is being done legally.

Ella: It depends on the terms of your lease or your state laws, if any. If your lease explicitly states that you must seek approval by landlord, then you must seek approval from landlord. Make sure you have the approval in writing to prevent any potential lawsuit if the new owner does not abide by the lease. Prior owners always seem to get pulled into litigation unless there is written documentation that they have been released. If your lease doesn’t address the issue of selling your business, then you need to see if your state has any statutory laws in favor of the landlord.

Adam: There are a number of precautions a business owner should take before selling his or her business. The first thing an owner should do is get a forensic accounting of the business so that it can be properly valued. The second thing a seller should always remember is to get all agreements and correspondence about the sale in writing.

Francis: No. Not every business lawyer is qualified to assist you with this type of matter. This is because some attorneys are actually more “corporate lawyers” who deal with securities issues, mergers and acquisitions, on the higher end, or merely simply perform business incorporations, on the lower end. The perfect profile is a business lawyer for small business , which in the U.S. is defiend by the Small Business Association (SBA) as having up to 500 employees! Ideally, the attorney has a business background, either in the form of a Business degree from a university, and/or experience in dealing with asset purchases that are prevalent among small business purchases.