Business Purchase Agreement Lawyer — Asset vs. Stock Purchases and Due Diligence

Buying a business can be the best investment you ever make, or the most expensive mistake. A business purchase agreement lawyer helps you structure the deal, uncover risks and put protections in writing.

The purchase agreement is where the real deal lives. Price matters, of course. However, warranties, indemnities and closing conditions decide who bears the risk if something goes wrong. Therefore, careful drafting protects you long after closing.

This guide explains asset and stock purchases, due diligence, key contract terms and seller financing.

Asset purchase vs. stock purchase

There are two main structures. In an asset purchase, the buyer buys selected assets, such as equipment, inventory and customer lists. In a stock or membership interest purchase, the buyer buys the owner's shares in the company itself.

Each has trade-offs. For example, buyers often prefer asset purchases, because they can leave unwanted liabilities behind. Sellers, however, often prefer stock sales for tax reasons and simplicity. Consequently, structure is usually negotiated.

Practical differences

Asset purchases can require assigning contracts, leases and licenses, which may need consent. Stock purchases transfer the company intact, including its history. As a result, due diligence is even more important in a stock deal.

Due diligence

Due diligence is the buyer's investigation. It reviews financial statements, tax returns, contracts, leases, employees, intellectual property, litigation and regulatory compliance. Moreover, it tests whether the seller's claims are accurate.

Start with a non-disclosure agreement so the seller can share information safely. Then work through a checklist. Our business acquisition review examines the key documents and flags risks.

Red flags

Watch for customer concentration, undisclosed debts, tax problems, expiring leases and pending lawsuits. Additionally, check whether key employees will stay. Any of these can affect price or terms.

Key terms in the purchase agreement

The agreement should define exactly what is being bought and for how much. Furthermore, it should address representations and warranties, indemnification, escrows or holdbacks, non-compete covenants and closing conditions.

Representations and warranties are the seller's promises about the business. Indemnification says who pays if those promises are untrue. Consequently, these clauses allocate risk.

Our Business Purchase Agreement service starts at $199. If the other side drafted the agreement, our purchase agreement review explains what to change.

Seller financing and closing

Many small business sales include seller financing. The buyer pays part of the price over time. In that case, a promissory note and security agreement protect the seller.

At closing, the parties sign transfer documents, such as a bill of sale and assignments. Subsequently, the buyer should update licenses, bank accounts and registrations. For entity setup, see our guide to LLC formation and corporate structuring.

Our Buying & Selling a Business services in the USA

Every service below has a fixed price, is prepared by a qualified attorney and is delivered online — wherever you are in the USA. Additionally, you can upload evidence, message your attorney and track progress from your secure client dashboard.

Buying & Selling a Business services near you — every state we cover

Because everything is handled online, it makes no difference where you live. Nevertheless, the law does change from state to state, so every document is prepared for your local rules. Here are some of the places our clients come from most often.

Buying & Selling a Business help in California

We prepare buying & selling a business documents for California law and local court practice. Clients come to us from Los Angeles (near the Stanley Mosk Courthouse downtown), San Diego (near the Hall of Justice on West Broadway), San Francisco (near the Civic Center courthouse on McAllister Street). For example, see Business Purchase Agreement in Los Angeles, Business Purchase Agreement in San Diego, Business Purchase Agreement in San Francisco. Similarly, see Business purchase agreement review in California.

Buying & Selling a Business help in Texas

We prepare buying & selling a business documents for Texas law and local court practice. Clients come to us from Houston (near the Harris County Civil Courthouse), Dallas (near the George L. Allen Sr. Courts Building), San Antonio (near the Bexar County Courthouse), Austin (near the Travis County Civil and Family Courts Facility). For example, see Business Purchase Agreement in Houston, Business Purchase Agreement in Dallas, Business Purchase Agreement in San Antonio, Business Purchase Agreement in Austin. Similarly, see Business purchase agreement review in Texas.

Buying & Selling a Business help in Florida

We prepare buying & selling a business documents for Florida law and local court practice. Clients come to us from Miami (near the Miami-Dade County Courthouse on West Flagler Street), Orlando (near the Orange County Courthouse), Tampa (near the George E. Edgecomb Courthouse). For example, see Business Purchase Agreement in Miami, Business Purchase Agreement in Orlando, Business Purchase Agreement in Tampa. Similarly, see Business purchase agreement review in Florida.

Buying & Selling a Business help in New York

We prepare buying & selling a business documents for New York law and local court practice. Clients come to us from New York City (near the New York County Courthouse at 60 Centre Street and the immigration court at 26 Federal Plaza), Brooklyn (near the Kings County Supreme Court on Adams Street). For example, see Business Purchase Agreement in New York City, Business Purchase Agreement in Brooklyn. Similarly, see Business purchase agreement review in New York.

Buying & Selling a Business help in Illinois

We prepare buying & selling a business documents for Illinois law and local court practice. Clients come to us from Chicago (near the Richard J. Daley Center). For example, see Business Purchase Agreement in Chicago. Similarly, see Business purchase agreement review in Illinois.

Buying & Selling a Business help in Georgia

We prepare buying & selling a business documents for Georgia law and local court practice. Clients come to us from Atlanta (near the Fulton County Courthouse). For example, see Business Purchase Agreement in Atlanta. Similarly, see Business purchase agreement review in Georgia.

Buying & Selling a Business help in Arizona

We prepare buying & selling a business documents for Arizona law and local court practice. Clients come to us from Phoenix (near the Maricopa County Superior Court). For example, see Business Purchase Agreement in Phoenix. Similarly, see Business purchase agreement review in Arizona.

Buying & Selling a Business help in Pennsylvania

We prepare buying & selling a business documents for Pennsylvania law and local court practice. Clients come to us from Philadelphia (near City Hall, home of the Court of Common Pleas). For example, see Business Purchase Agreement in Philadelphia. Similarly, see Business purchase agreement review in Pennsylvania.

Buying & Selling a Business help in Washington

We prepare buying & selling a business documents for Washington law and local court practice. Clients come to us from Seattle (near the King County Courthouse). For example, see Business Purchase Agreement in Seattle. Similarly, see Business purchase agreement review in Washington.

Buying & Selling a Business help in Colorado

We prepare buying & selling a business documents for Colorado law and local court practice. Clients come to us from Denver (near the Denver City and County Building). For example, see Business Purchase Agreement in Denver. Similarly, see Business purchase agreement review in Colorado.

Buying & Selling a Business help in Massachusetts

We prepare buying & selling a business documents for Massachusetts law and local court practice. Clients come to us from Boston (near the Edward W. Brooke Courthouse). For example, see Business Purchase Agreement in Boston. Similarly, see Business purchase agreement review in Massachusetts.

Buying & Selling a Business help in Nevada

We prepare buying & selling a business documents for Nevada law and local court practice. Clients come to us from Las Vegas (near the Regional Justice Center). For example, see Business Purchase Agreement in Las Vegas. Similarly, see Business purchase agreement review in Nevada.

Buying & Selling a Business help in New Jersey

We prepare buying & selling a business documents for New Jersey law and local court practice. Clients come to us from Newark (near the Essex County Hall of Records). For example, see Business Purchase Agreement in Newark. Similarly, see Business purchase agreement review in New Jersey.

Buying & Selling a Business help in North Carolina

We prepare buying & selling a business documents for North Carolina law and local court practice. Clients come to us from Charlotte (near the Mecklenburg County Courthouse). For example, see Business Purchase Agreement in Charlotte. Similarly, see Business purchase agreement review in North Carolina.

We also help clients in Alabama, Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming. See every location we cover.

Business Purchase Agreement in every state

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This guide is general information, not legal advice for your situation. Every case is different — speak to a qualified attorney before you act.