If you are considering purchasing an existing business of any kind, whether it is a franchise or an independently owned entity, chances are that you are working with an attorney or legal counsel of some kind. Since the complexities of a business purchase can be much more involved than what you may have bargained for, working with a business attorney is generally a good way to ensure that you are going into your investment fully prepared and with all of your cards on the table. An attorney can help you sort through the legal language of the sale and make sure that all disclosures are properly made before you sign any papers. For example, you may not have considered all of the questions that will be asked of you as a potential business owner. But with the help of a good lawyer, you will be able to answer all the necessary pre-purchase inquiries.
What Your Lawyer May Require of You
Both your attorney and the current owner of the business you are considering investing in will need a wealth of information for you in order to get the purchase process going. Your legal counsel may request this information at your first meeting, or they may ask for it as you get further into the sale. Here are some examples of personal, financial and other information that you will need to have at the ready in order to go through with the purchase.
- Personal Information
- This may include your name, date of birth, home and business addresses, phone numbers, fax numbers, email addresses and website URLs.
- Business Partner Information
- All relevant information about any potential business partners you may have must be given, starting with the above personal information about the partner(s). Next, your attorney will need to know who will own the business initially, how the business will be split in terms of percentages between the partners, who will contribute and how much. Be prepared to declare what partners are expected to be employees of the business, in what capacity and how much they will be compensated. Let your lawyer know if you have any preexisting business agreements or contracts with your partner(s).
- Business Management Strengths and Weaknesses
- Your attorney may ask you about what strengths and weaknesses you have to offer as a manager. Are you an excellent boss or more of a team player? Do your peers treat you with respect and distance or are they close and friendly with you? Does your demeanor demand seriousness or do you like to joke around on the job? How will your attributes, and those of your partner(s), bring success to this business?
- Proposed Purchase Information
- When it comes to financial information about the potential purchase of the business, it is very important to have all your ducks in a row. Be prepared to share whether you might declare the business purchase as an asset, a stock or a corporate merger. Tell your attorney if you have had any dealings with a broker and what those terms were, and let them know if you have done anything to incorporate your business or if you have written out a business plan for the future.
- If the current owner has given you any documents or letters of intent related to the business, have copies of those statements available. Any information about possible business loans that you may be eligible for will also be necessary. If you have any consultants or tax professionals who may assist you, be prepared to share their details. Any dealings with investors should be disclosed, as well as plans to move the business’s real estate or operate it anywhere but its existing location.
Having the answers to these inquiries in order will save you time and effort when it comes to going through with the purchase of your business.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.