What You Should Know When Buying a Business
We often find ourselves representing the seller of a business, which is why we’ve published a couple of articles on the topic.
We get it – as a buyer you’re already shelling out money to buy the business and don’t want to shell out additional money to pay an attorney to walk you through the process, especially when the escrow company or broker is nice enough to give you a form purchase agreement to use.
Stop. Right. There.
First, it’s unlikely either the escrow company or the broker is also a law firm, therefore they shouldn’t be providing contracts in the first place. Second, they are probably not representing YOU so they aren’t looking out for YOUR best interests. They just want the deal to close so they get paid their commission or their escrow fees or whatever. That’s why you need someone representing your interests because there are a ton of pitfalls to avoid when buying a business. Let’s walk through the process.
First, you find a business you might want to buy. You might find this business through a listing, word of mouth, through a broker, etc. Now, given that you don’t own the business, you aren’t privy to all the information about the business that would help you make an informed decision. Consider the TV show Storage Wars. If you haven’t watched it, the format goes like this: a storage unit place (what are they even called?) will, after a customer stops paying, take ownership of the contents in the storage unit and sell them off. In the TV show, a group of people gather at the storage unit place (again, there’s got to be a term for that) and the owner of the SUP (I give up) will open the door to the unit to waiting bidders. At that point, the bidders have only a short amount of time to decide whether they want to buy everything in the unit and the bidding begins, with the entire contents of the unit going to the highest bidder.
Read the entire article at Bongiovi Law Firm: https://bongiovilaw.com/2020/12/what-you-should-know-when-buying-a-business