HVP Law has more and more clients looking to transition their businesses whether they are new or even legacy businesses. Other times circumstances dictate the need for a
business transition like death, divorce, or bankruptcy. In either case as it may be understanding the circumstances for the sale is an important driver to dictate various terms. Of course, clarity in dealings of this nature can add to peace of mind. A short list of considerations is as follows:
Goals – consider the end goals of the sale. Is it tax minimization, liability transfer, a life change? Keeping an eye on the goal can guide the process.
Legal structuring – reviewing legal structural documents, if any, can be most helpful. In the case where there are structural documents, such documents provide the business owner with an idea of the procedures mapped out in those documents. Some businesses lack these operational documents like by-laws/operating agreement(s) and while of course from a legal point of view it is better to have clarity over the structural processes should they be an issue, not having these agreements underscores a need for creating clarity through the sale documents.
Licensing – for operation in various states, some businesses have certain licenses. Some of these licenses may be transferrable to a new owner, others are user specific. Before investing in the legal side of drafting the buy-sell agreements it is helpful to understand the landscape you are working in.
Filings – is there intellectual property held by the business? If so transferring the ownership can be added to your list of things to address.
Valuation & Tax – how much is your business worth? How’d you come to that number? Sometimes folks don’t know, so there are professionals to consider adding to your team. Of course tax implications are a major issue as well.
At the end of the day, partnering with your resources will provide much needed peace of mind and allow objective professionals to handle things for you. Our team of legal advisors can help.