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How to Buy A Business in Houston Texas- Advice of An Attorney
Anyone who has bought an already established business before will tell you for free that it is a much more involving process than the average high ticket purchase. You may need the assistance of an experienced business lawyer for you to gain the desired and expected results of a deal.
Numerous advantages could sway a person to buy an established business in Houston. It could be the already established clientele base that caught your eye, or the employee and product distribution operations are already in place. However, you need to move forward with your options open. Why is the owner selling the business? Is the business slowing down? Are the business and environmental conditions about to change and the owner wants to find his way out of the situation? Could there be virtual debt within the business? In many cases, the best business to buy should be one whose owner wants to retire gracefully and the owner must be a very successful business person in the business he or she set. But how do you tell this?
Many questions will run through your head when trying to sort out the finer details about the purchase agreement. Before you assume the helm of already running a business, it is advisable to seek legal and financial help.
Due Diligence Review
You may not have enough expertise to interrogate and uncover underlying causes of the owner wanting to sell the business. Financial and legal experts will overturn every financial and legal rock hiding the business helping you get a clear picture of the kind of business you are interested in buying. The investigation should uncover the owner’s history and the very reason the owner wants to sell the business. If there are any approaching massive lawsuits that the owner could be running from and probably cause changes in the future financial records, the legal team will find out. If there are any undocumented income claims, your legal and financial team will help uncover the causes.
Start Off If Impressed
Once the findings of the investigations are out, and you can see the real picture of the business, you can get your instincts to let you determine if to go ahead with the purchase or back down. If you have a favorable impression of the enterprise, have your attorney write down a letter of intent to purchase the business. A letter of intent outlines what you want to buy, and if there are any liabilities and employees, you plan to carry on with or default. Working with a lawyer will help you understand the Houston laws concerning the rights you have to lay off employees and what kind of lawsuits you may face after a particular action.
Negotiating The Purchase Agreement
Your attorney will help you negotiate the purchase terms if both you and the business owner agree to the buying and selling clause. You may not understand some of the legal terms used in the agreement. An asset agreement entails on you buying some or all the assets, but you will not carry on with the seller’s liabilities and debts. A stock purchase, on the other hand, entails on buying the enterprises’ stock while the debts become yours to handle. A merger comes in if both you and the owner agree to merge your businesses to form a new business. Mostly, a merger involves a tax-free stock swap.
If all goes as planned, and the negotiations end successfully, you will be in a good position to oversee your new enterprise with few or no issues from the past.
In the case where you need an investor to finance the running of the newly bought business, you need legal help mainly because the regulations and compliance laws differ from state to state. The lawyers involved will draft a contract protects both you and the seller. The lawyer is in a better placed to understand the legal language used in contracts, federal and state laws to help keep you out of trouble.
Intellectual Property Transfer
If the business has any valuable trademarks, copyrights, product secrets and information that helps run the business, an attorney ensures that the seller inherits all the property fully from the owner. Many feuds arise during this stage and in the absence of a lawyer one may have lost the key to running the business successfully which translates as unfair to the new owner.
Attorneys may act as witnesses as well as ensuring all the documents get signed appropriately and that the money exchanges are correctly done. The attorney will interpret, rectify and help you understand any ancillary documents as well as safely guide you through them in case of any disputes.
In case, you are ready to buy a business, contact us at Toppins law firm for professional guidance.
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