Hey Ryan, I’m thinking about buying a business. “What do you think?” I’ve been asked a few times. My response is always we should talk about your case individually. Let me tell you how I, as your lawyer, can help. Here are five ways your lawyer can help you when you’re buying a business.
Negotiating the Purchase Contract – Like buying a house, you will need to negotiate the details of your business purchase. You should define in the purchase contract who is responsible for each part of the business and when and how responsibility shifts from the seller to you as the buyer. Issues can arise involving the premises where the business is located, whether leased or owned by the business; business assets, such as inventory and equipment; intellectual property, such as trademarks; or even the business’s outstanding bills and accounts receivable.
Organizing a Company to Purchase the Business – Did you know that a business can own another business? Setting up an LLC or corporation to buy the business allows you to put contracts, loan agreements, or a lease in the name of a business. In so doing, you can protect your personal assets from the risks of the business.
Doing Proper Due Diligence – Just because a business appears successful at first glance, or even shows a profit, does not mean there are no pitfalls. The business could be in litigation, or it could be subject to a future lawsuit. There could also be other issues hiding below the surface.
Registering Your Business – In Maryland, all businesses must register with the Department of Assessments and Taxation. You will need organizational documents that comply with the legal requirements for an LLC or corporation.
Drafting Operating Agreements – If you are organized as a corporation or LLC, you will need an organizational document to say how the entity conducts its business. If you are going into business with someone else, you absolutely need an operating agreement to say how decisions are made and how the business operates. Your operating agreement can prevent problems between you and your business partners – or at least settle a disagreement should one arise.
Call our office today at 240-638-2721 for a consultation about your business planning needs.