WILL THE SALE BE VIA STOCK PURCHASE OR AN ASSET PURCHASE?  There are numerous pros and cons to each type of arrangement.  From a buyer's perspective, an asset purchase is sometimes the cleanest way to go. As a buyer, you could acquire all the assets of the business subject to an understanding that they would be free and clear of all liabilities.  In contrast, a buyer agreeing to a stock sale can usually be held accountable for all debts and obligations of the corporation that's being sold. For this reason alone, many buyers decide not to go with a stock sale.

On the other hand, a stock sale can be much easier to accomplish because it may involve nothing more than swapping a check for stock certificates. The transition process is sometimes much easier with a stock sale, too, because title to the business assets remain with the corporation. The buyer is simply stepping into the shoes of the stockholder.

Depending on the size and complexity of the deal, there may be spin-offs, divestitures, or other undertakings that make it difficult to pigeonhole the transaction as an asset purchase, a stock purchase or a merger.

Either way, most deals will include the following elements and proceed in this approximate order as well:

• Preliminary Discussions
• Negotiating a letter of intent
• Signing a confidentiality agreement

• Drafting and finalizing a formal agreement
• Undertaking due diligence
• Seeking approval from governmental authorities and consents from third parties
• Closing
• Post-closing adjustments
• Negotiating the Deal
• Utility Patent: Medical Devices
• Utility Patent: Mechanical Devices

A BUSINESS PURCHASE / SALE IS A MULTI-FACETED, LONG-TERM TRANSACTION THAT REQUIRES LEGAL COUNSEL ON MANY ISSUES AND ATTORNEY OVERSIGHT THROUGHOUT.  At first glance the transaction might appear to be just another oral agreement between two astute business people.  Unfortunately, this is rarely the case – and more importantly – it is not worth the gamble hoping that that will be the case.  When a business sale occurs, one party is putting up a large sum of money and often their business credit rating on the line – often their personal credit rating as well.  The other party is relinquishing control and ownership of an entity that required blood, sweat and tears to create.  A business attorney will help guarantee that your important and varied interests are protected throughout the transfer of property, make sure that prices are fair and asset valuations are realistic.

At the outset every businessperson imagines their dealings concluding smoothly, but they rarely ever do.  Having the business attorneys at Jafari Law Group oversee the purchase / sale of a business will give you the peace of mind you deserve during such a consequential transaction.  To most individuals, paying a lawyer before trouble occurs can seem like throwing money out the window.  But, that is exactly what growing and successful companies the world over do everyday – in-house counsel is the manifestation of that need.  Or, as Benjamin Franklin noted, “An ounce of prevention is worth a pound of cure.”

Let the business attorneys at Jafari Law Group help you with professional and affordable business counsel before any problems arise.  If you are ready to take one step closer to completing a successful purchase or sale of a business, please contact one of our attorneys at 877.821.9216