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Purchases and Sales:  
Businesses and Professional Practices

The purchase and sale of businesses and professional practices involve a multitude of critical legal issues, as shown below, requiring the assistance of experienced legal and accounting services.  There is no substitute for experience, which will cost you less in many ways in the short and long runs.  Often, you can obtain a fixed fee for these services based upon the value of the transaction, which can be substantially lower than the brokers’ fees. 

Speaking of which, while you may want to rely on a broker to guide you through the process, please consider that the broker (1) has a significant interest in closing the transaction, rather than protecting your interests, (2) may be representing both buyer and seller with the obvious potential conflicts involved, and (3) cannot lawfully practice law by tailoring the transaction to your particular legal needs.

Bring your lawyer into the process sufficiently prior to submitting your offer or accepting anyone’s offer, so that all of the below issues can be adequately addressed, not neglected:

• Valuation of a business or professional practice, price, price allocation, and payment provisions

• Due diligence and buyer inspection rights and conditions, including disabilities, zoning, and environmental laws

• Determination of all of the business or professional practice assets: Furniture, fixtures and equipment; Inventory, supplies and other consumable materials; Customer or client lists, contacts, and files; Business or professional practice name, trade names, trademarks, service names, signs, service marks, logos, brochures, telephone and fax numbers; Computer software and data; Goodwill and other intangible personal property; contracts, warranties, licenses and permits; Accounts receivable and work-in-progress; Real estate or lease; Internet domain names and website; and any other valuable, obvious asset

• Determination of all liabilities to be assumed and not assumed by buyer: Generally none of the liabilities of seller should be assumed in an asset transaction, including without limitation, federal, state or local tax liabilities, employment liabilities; compensation or other amounts due to others rendering services to seller; or leases, contracts or agreements with respect to or covering the business or professional practice, unless valuable to the buyer.

• Non-competition & non-solicitation covenants

• Non-disclosure and Non-use of confidential information provisions

• Escrow, escrow instructions, and compliance with state bulk-sales laws

• Necessary conditions for buyer and seller to close the transaction

• Valuable warranties and representations of buyer and seller

• Indemnities of buyer and seller

• Conduct of business professional practice by seller prior to closing, including introductions to customers or clients and employee continuance, compensation, and policies

• Risk of loss timing

• Early possession provisions, if necessary

• Post-closing employee provisions

• Dispute resolution provisions

• Seller’s responsibilities post-closing, especially training

Please send all enquiries by email
with the following disclaimers to:
Info@BealBusinessLaw.com
©2002-2010 Bruce Leonard Beal
(excepting graphics, as freeware
and/or in public domain)
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