Do You Need To Hire a Lawyer When Buying a Business?

Small businesses and major conglomerates alike may become the center of a business purchase agreement. If you are leading the charge and hoping to acquire another company, hiring an experienced attorney could be beneficial. This begs the question: Do I need a lawyer when buying a business?

Our team at Anthony Law Group is here to explain the advantages of having legal representation during this entire process. Contact our firm if you are looking for a Phoenix business lawyer to assist you with an upcoming transaction.

An Attorney Could Help You Do Your Legal Due Diligence

Every prospective buyer should research any enterprise they are looking to purchase. Thorough due diligence allows you to manage risk and identify any issues that could impact your future as an owner. If you want to feel confident in your purchase, it is wise to rule out any financial or legal risks.

The existing company owner could claim to be in good standing with federal laws and tax obligations. However, if you do not confirm these claims, you will not be aware of any outstanding issues until you become the new owner. For example, a business may owe thousands in back taxes. The responsibility might then fall on you once the sale goes through, depending on the deal’s terms.

A comprehensive liability assessment is crucial in a business transaction. If you want to protect your money and mitigate risk, consult an attorney before buying.

Have a Lawyer Review Your Agreement and Handle Contract Negotiations

“I’m on good terms with the existing owner, and we have already worked out a sales agreement. Why do I need a lawyer when buying a business?”

Even if the deal seems perfect, there could be some hidden language within the agreement that may not benefit you long-term. For example, you and the seller could agree on the sale price, but if the contract excludes certain assets, such as intellectual property, it may lead to eventual disputes.

An experienced business attorney will be familiar with different contract types and can carefully review them. They represent you and aim to protect your interests. If the current agreement has details you want to sort out, your lawyer may negotiate on your behalf in an attempt to reach favorable final terms.

Legal Counsel Can Weigh In on Regulatory Compliance Requirements

If you ask a professional, “Do I need a lawyer when buying a business?” they could point out some compliance concerns that are worth discussing with an attorney. A business acquisition isn’t always straightforward. As a potential buyer, you have to do your due diligence and identify all regulations you will need to comply with.

Before you can even think about the asset transfer process, consider meeting with an attorney to discuss various regulations tied to your purchase, such as:

• Licensing requirements
• Necessary permits
• Building codes for the commercial property
• Compliance standards for your specific industry

Some entrepreneurs focus only on acquiring assets and don’t think about the risk involved in purchasing a business. Legal issues may arise if you move forward with the transaction without reviewing all compliance standards.

You Can Compare Different Deal Structures With a Professional

Seeing something you like in an existing business and wanting to acquire it could be a challenge. Instead of wondering, “Do I need a lawyer when buying a business?” ask yourself, “How can I purchase this business so it suits my needs?” An experienced attorney could help you figure out which deal structure is right for you and craft a contract.

Check out some common types of deals that business brokers may pursue.

1. Stock Purchase

You could potentially purchase a company holding stock or membership interest through this agreement. While it may present some unique liability risks, the transaction usually does not mean any immediate changes to contracts or employees. Buyers and sellers alike could benefit from this type of deal, though they should compare it with other options.

2. Asset Purchase Agreement

Perhaps you do not want to acquire an LLC, corporation, or other legal entity. However, if you would like to buy some of its existing business assets, have a business lawyer review an asset purchase agreement. Some of the assets business brokers may decide to acquire include:

• Real estate
• Equipment
• Intellectual property
• Client lists

Make sure you fully understand the aspects you would like to acquire in a sale. While this type of transaction offers flexibility for buyers, it may come with legal obstacles as you attempt to transfer contracts or licenses.

3. Seller Financing

“Do I need a lawyer when buying a business only, or should I hire one if I plan to sell my enterprise?” Both parties could benefit from legal representation. Navigating a deal based on seller financing may be tricky.

Hire a legal professional who is well versed in business and contract law. They could oversee the deal, which may provide the seller with ongoing income through loans, performance-based payments, or similar measures.

How To Find a Qualified Business Lawyer Near You

Purchasing an existing business can be a challenge. Finding a lawyer to represent you does not have to be. Here are some helpful tips for narrowing down your options:

• Look for experience: Choose a business attorney with ample experience in this practice area.
• Read reviews: Browse online reviews and testimonials to see what an attorney’s former clients have to say.
• Ask about strategies: Meet with different attorneys and ask how they would handle your case based on their past experience.

Consult a Phoenix Business Attorney About Your Options

Do I need a lawyer when buying a business? What about if I’m selling a business? No matter what type of business opportunity you wish to pursue, a qualified attorney can help you navigate the complex legal process.

Reach out to Anthony Law Group if you’re considering a major business acquisition. Founding attorney Stephen J. Anthony has over 25 years of experience practicing business law. He understands the complexities of purchase agreements and other contracts involved in acquiring a company.

Anthony Law Group is committed to helping clients manage risk. Call (602) 362-2396 to schedule a consultation.