Drafting Buy-Sell Agreements
Drafting Buy-sell Agreements
If you will be buying or selling a business, there are many strategic considerations to be made, so it is wise to consult our Needham business contracts lawyer to assist with drafting your buy or sell agreement. There is a complex web of local, state, and federal laws that governs business sales and stock transfers. From the initial negotiations to drafting the final agreement and enforcing the provisions of the sale, our Needham business contract lawyer can make the process simpler and discourage other parties from trying to take advantage of you.
Types of Business Acquisition Agreement
The vast majority of business sales use either an entity purchase agreement or an asset purchase agreement to guide the sale process. Depending on whether you are the buyer or seller and the type of assets involved, the most appropriate type of agreement will vary.
- Entity Purchase Agreements: in this format the sale includes a majority share or all of the stock in the business. The buyer generally assumes all of the debts and obligations of the business and has the intent to keep the business functioning as an ongoing concern.
- Asset Purchase Agreements: this type of acquisition agreement is for the assets of the business, and in many cases the new owner may not intend to keep the business in operation. Rather, the purchaser may use the property, equipment, and intellectual property as part of a new venture and leave the former owner with a “shell” of the previous business.
As with any business negotiation, some agreements are advantageous to the buyer and detrimental to the seller or vice versa. For example, a seller usually prefers an entity purchase agreement to take advantage of lower long-term capital gains taxes. The seller will also want the buyer to assume the business debts and obligations to avoid any future liability on a company the seller no longer owns.
Hire a Needham Business Contracts Lawyer
Whether you are buying or selling an entire business or the assets of a business, there are significant tax, contract, and property issues that will need to be evaluated. While it may seem difficult to stay compliant, Attorney Alan Segal has many years of experience as a Needham business contracts lawyer and can provide answers to your specific questions and draft the right business acquisition agreement for you. Call The Law office of Alan H. Segal today for a business contract consultation. We may be reached at (339) 499-9099.