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Selling Your Business

Whether you want to retire, change your lifestyle, start a new business venture, or the market trends indicate that it is the right time to sell, if you are interested in selling your business, you should consider partnering with a law firm that specializes in purchase and sale of businesses.

Operating a business involves a number of legal specialties, including corporate governance, owner-relations, intellectual property, commercial contracts, commercial leasing, tax law, real estate, labor and unemployment, and financing. At Lotus Consulting & Law, a business attorney will familiarize with the operations of your business and carefully review the business and corporate records to gain an understanding of the business before assisting in negotiation a sale.

Partnering with Lotus Consulting & Law will allow you to plan and execute your exit strategy with an experienced business lawyer. We will work with you to obtain a business valuation. Sales prices can be based on valuations but can also be negotiated between the seller and buyer based on factors such as the value of intellectual property, discoveries during due diligence, market trends, the value of receivables in progress and seller financing.

Hiring an experienced business attorney when selling your business is just as important as finding the right buyer for your business. An experienced business attorney will serve as a business consultant, negotiate for the business owner, anticipate and resolve potential complications in advance, assist in navigating the various stages of the deal, and complete the closing of the sale.

Once you decide to sell your business, the first step is to consult with an experienced business attorney. A business attorney will work with the business’ tax advisor or CPA to determine the structure of the business sale and the tax implications, and work with you in obtaining a business valuation. Capital gains tax, sales tax and ordinary income tax implications will differ based on whether the sale is structured as a stock sale versus an asset sale.

Next, you will need to decide whether you need to engage a business broker in marketing your business for sale and finding potential buyers. If you do decide to engage a business broker, completing due diligence on the broker’s track record and prior success is especially important.

When a potential buyer expresses interest, a business attorney will provide you with a letter of intent with your preferred terms for the sale. Items that are typically addressed in a letter of intent include the structure of the sale, purchase price, due diligence period, any covenants of non-compete or non-solicitation, whether the business’ intellectual property such as websites, trademarks, logos, patents, and copyrights are included in the sale, whether current employees will be hired by the new owner, any consulting period, and the closing date. A letter of intent should be treated as a non-binding agreement of the seller’s and buyer’s intent to enter into a more definitive purchase and sale agreement.

Once an interested buyer signs a letter of intent, the business attorney will prepare the necessary purchase and sale documents. Seller financed deals will involve taking security in the assets of the business and will require additional agreements and filings.

Regardless of the type or size of your business, selling your business is a very involved process. Lotus Consulting & Law can partner with you to work out the details so you can head off into the next chapter— whether that is retirement, a different lifestyle or a new business venture.
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