Purchasing an existing business often means avoiding high startup costs, as well as hiring challenges and organizational dilemmas. While you are able to take control of a profitable, functioning business, there is more involved than simply writing a check. 

• Due diligence: an investigation to examine the business’ assets and liabilities. Tax returns, recurring bills (utilities, lease, etc.) and other indicators of financial performance can also be examined. In addition, compliance with zoning and environmental guidelines, as well as licensing, can be reviewed, as can sales records; contracts and employment agreements. 
• Pricing: various methods can be used to arrive at the financial value of a business.
  • Cash flow: how will it address existing debt?
  • Weighing assets against liabilities
  • The initial concept for the business, as well as its existing customer base, goodwill, brand and intellectual property to be conveyed in the sale may also become part of a company’s fair sale value. 
• A buyer must consider these factors independently of the seller’s assurances. There may be a large disparity between the buyer’s valuation of the business and the seller’s valuation of its worth.
• Negotiation: regarding both a fair price and how the price will be paid (asset sale, stock or partnership certificate sale, etc.). 
• Documentation: after the sale of an existing business is agreed upon, the parties will formalize the transaction in documents such as a letter of intent, confidentiality agreement, promissory notes, transmission of patents, trademarks and copyrights, non-compete covenant, a sales agreement, as well as other documents, depending on the business and the form of the sale. These contracts are binding and must be precisely written – in a manner that protects each party’s interests.

Regardless of whether you are the buyer or seller, it’s important that you have the legal assistance needed to manage the many small details involved in the transaction and help it proceed smoothly. It’s equally important to have the objective and experienced counsel of an attorney whose job it is to protect your financial interests. The trusted  Las Vegas lawyers at Raich Law have the knowledge and experience necessary to oversee and resolve the many legal issues that arise in the purchase or sale of an existing business. 

If you are buying or selling an existing business, Raich Law will help you proceed smoothly through the transaction, review all major issues are and help draft all required documentation. The attorneys at Raich Law have experience in all forms of business law representation, including business formation, business development, mergers and acquisitions, and ownership conveyance. Call us today at 702-758-4240 to learn more.