lawyer when buying into a company r

by Norval Beahan Sr. 4 min read

What kind of lawyer do you need for a corporation?

Corporate Lawyer. If you own a corporation, you’ll likely find yourself consulting with a corporate attorney on many different occasions. A corporate lawyer will be able to help you with issues related to the formation of your corporation, general corporate governance issues and corporate compliance issues.

Can a buyer and seller hire the same real estate attorney?

A real estate attorney should advocate for their client, but it’s impossible to give them the best deal if they represent both because their interests are different. However, the buyer and seller are allowed to hire separate attorneys from the same law firm.

Do I need a real estate attorney to buy a house?

Depending on your locality, state laws and the exact nature of the transaction, you may need to enlist the services of a real estate attorney (and have the cost included in your closing costs).

Do you need a lawyer to start a small business?

But more importantly, a lawyer can identify the risks you face and help you minimize them. When you meet with your lawyer for the first time, it’s a good idea to have some questions in mind. But as a new business owner, you may not even know where to start. Here are some things to ask.

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Who is responsible for drafting a purchase agreement?

Typically, the buyer is responsible for drafting the purchase agreement because the buyer is the one putting up the cash and has the greatest risk of loss. Ideally, you should have a contract attorney draft this document for you, particularly one with experience in mergers and acquisitions.

Why is it important to buy a business?

Unlike most purchases, buying a business is quite unique because it can result in significant financial, tax, legal liability, and other ramifications. For this reason, it is important to use a process that minimizes your risk following the completion of the transaction (the closing). This article assumes that you've identified a business ...

What is due diligence in a purchase agreement?

Due diligence is an examination of anything and everything about the target company that could create any liability for you once you're the new owner. For example, tax, environmental, litigation, regulatory, and contractual liabilities are common areas of potential exposure. This is particularly critical from your perspective because you, as the buyer, will be responsible for these liabilities going forward. The purchase agreement should include ironclad provisions that either limit or eliminate the buyer's exposure to such liabilities. For example, the buyer could either require that the seller remove certain liabilities as a pre-condition to closing, indemnify the buyer for certain post-closing liabilities, or accept a reduced purchase price. Note that there is always a possibility that your due diligence investigation could reveal one or more liabilities that you find to be excessively problematic, resulting in your decision to walk away from the deal altogether. While this could seem like an unfortunate result at first, you should also appreciate that proper due diligence can prevent you from entering into a transaction that would have otherwise resulted in immense frustration or loss down the road.

What is due diligence in business?

Due diligence is an examination of anything and everything about the target company that could create any liability for you once you're the new owner. For example, tax, environmental, litigation, regulatory, and contractual liabilities are common areas of potential exposure.

What are the three basic structures of buying a business?

Although there are various creative ways to buy a business, there are three basic structures that are the most common: merger, stock purchase, and asset purchase. Each of these choices have different layers of complexity and varying tax and liability consequences.

Can an attorney text you?

Attorneys have the option, but are not required, to send text messages to you. You will receive up to 2 messages per week from Martindale-Nolo. Frequency from attorney may vary. Message and data rates may apply. Your number will be held in accordance with our Privacy Policy.

What does a business lawyer do?

A business lawyer can explain how to start a business and answer your business law questions. But more importantly, a lawyer can identify the risks you face and help you minimize them. When you meet with your lawyer for the first time, it’s a good idea to have some questions in mind.

Why is it important to meet with a small business attorney?

Meeting with a small business attorney is an important way to get your business off to a good start and minimize future risks. Here are questions to ask at your first meeting. New entrepreneurs have their hands full, making plans, developing products and services, and lining up financing.

How to start a business off on the right foot?

Always ask your business attorney to assess your risks and identify ways to alleviate them. Getting business advice and legal help from a small business lawyer is a smart way to start a business off on the right foot. But don’t lose touch with your lawyer once your business is up and running. Make it a habit to seek business legal advice regularly ...

What to do before starting a small business?

Before starting a small business, you must decide how your business will be structured. If you do not form a formal business entity, your business will either be a sole proprietorship (with one owner) or a general partnership (with more than one owner). Legally, you and your business will be the same “person,” so if your business has debts ...

What are the federal laws?

Federal laws range from anti-discrimination laws to health and safety regulations to wage and hour laws. You may need policies and procedures, handbooks, and training to ensure that you don’t inadvertently violate them. You must also comply with state laws relating to such things as the minimum wage.

How does a contract protect a business?

Contracts protect your business by describing the rights and responsibilities of the parties to the agreement. A well-written contract can reduce the number of disputes that arise, ensure that you get paid for the work you do, and provide a clear remedy if one party doesn’t hold up its end of the deal.

Can you use a name that another business is already using?

Every state has rules about the names that new business entities can use, and in general, you can’t choose a name that another business is already using. Also, it’s risky to choose a name that might infringe on another business’s registered trademark.

What can a corporate lawyer do for you?

A corporate lawyer will be able to help you with issues related to the formation of your corporation, general corporate governance issues and corporate compliance issues.

What is an employment lawyer?

Employment Lawyer. Whether you’re a company that’s having a problem with an employee, or an individual who’s having problems with the company you work for, an employment lawyer can generally provide advice about legal issues which arise from an employment contract or within an employment relationship.

What is a disability attorney?

The Social Security Disability system can be a particularly complex system in which to navigate. An attorney who specializes in Social Security Disability issues can help you with any step in the Social Security Disability process, including assisting you with eligibility issues, launching an appeal of a decision to deny you benefits and dealing with the reduction or termination of your benefits.

What is an estate planning lawyer?

The estate planning lawyer specializes in wills and trusts, and can help you to draw up a will to pass on your assets. Among other estate planning legal services, this type of lawyer can help you set up a trust which will help take care of your children’s financial needs.

What is a worker's compensation lawyer?

If you’ve been injured while on the job, or have had to face the death of a loved one as a result of a workplace accident or occupational disease, a lawyer who specializes in workers compensation law can help you navigate the issues you face, such as the extent of the employer’s fault and the amount of benefits to which you are entitled.

What is an IP lawyer?

Also known as an IP attorney, an intellectual property lawyer can advise you with regard to issues relating to intellectual property, such as copyrights, trademarks, patents, industrial design and trade secrets.

Do lawyers specialize in a particular area of law?

The legal field is vast and complex, and you’ll find that many lawyers specialize in a particular area of law. If you find yourself in need of a lawyer, make sure they have the expertise to handle your unique situation. Because there are so many different types of lawyers, you'll want to match your legal concern with the appropriate attorney.

What is the phone number to sign a contract?

So if you would like to have me represent you or prepare a contract for the sale of a business well give me a call at 727-847-2288.

Do you assume the debts of the seller in a business transaction?

Usually with the accounts receivable, if you have those in a business, stay with the seller and so it’s up to him to collect those monies. In an ordinary business transaction you do not assume the debts of the seller. That is all specified in a contract for the sale and purchase of a business.

Who assumes any tax liabilities of the Company?

In an asset sale effected by a merger of the Company into the purchaser (or a subsidiary of the purchaser), the purchaser (or subsidiary of the purchaser) assumes any tax liabilities of the Company (including any tax liability resulting from the merger) by operation of law. 11.

What are the after tax consequences of selling a business?

The after-tax consequences of buying or selling a business can vary significantly depending on the tax classification of the entity conducting the business (referred to in this outline as the “Company”) and on how the sale is structured. Often, what is good for one party to the sale is bad for the other. The structure of the sale, therefore, is often driven by the relative bargaining positions of the parties and, in any event, may affect the price paid by the purchaser.

Why do stockholders prefer a stock sale?

Even from a non-tax standpoint, the stockholders may prefer a stock sale because the purchaser assumes the economic burden of any Company liabilities subject to any continuing obligations of the stockholders to indemnify the purchaser for breaches of representations and warranties under the purchase agreement.

What is reverse subsidiary merger?

In a reverse subsidiary merger, the purchaser forms a transitory subsidiary, capitalizes the transitory subsidiary with the purchase price (which may include borrowed money if the purchase will be leveraged), and then merges the transitory subsidiary into the Company.

Can a private company avoid parachute payments?

If the Company is private, the applicability of the parachute rules can be avoided by subjecting what would otherwise be parachute payments to approval by the Company’s stockholders. Unfortunately, for the approval to achieve its purpose, the right of the disqualified individual to receive the payment must be made contingent on the approval.

Does a partnership's distribution trigger the gain inherent in the obligation under Code Section 453B?

Under Regulations Section 1.453-9 (c) (2), a partnership’s distribution (governed by Code Section 731) of an installment obligation should not trigger the gain inherent in the obligation under Code Section 453B.

Can you pay a portion of a purchase price over time?

It is not un common for a portion of the purchase price to be paid over time or in the form of an “earn-out” as certain goals or milestones are met (with the deferred payment obligation evidenced by a note or by the purchase and sale agreement). In addition, a portion of the purchase price may be held back or deposited into an escrow account to secure obligations of the Company or its owners to indemnify the purchaser for breaches of representations, warranties and covenants.

1. Do your due diligence

Due diligence is an extensive step that will likely be the most time-consuming part of the law firm buying process. Due diligence includes reviewing the statements listed above and meeting with the law firm’s owners and key employees. In addition, when conducting due diligence, you should build a team to assist with the deal.

2. Utilize forums for your questions

Plugging into a law community is a great way to engage with legal professionals who have gone through the buying process. This way, you can connect with other lawyers who can recommend best practices and refer other professionals to help with your due diligence.

3. Prioritize the practice type, clients, and branding

As a lawyer about to buy a law practice, you need to know your must-haves when viewing potential practices to purchase. Like buying a house, you should know the ideal practice area, client base, branding, and reputation of the firm you wish to buy.

5. Create a transition plan

When you’ve decided to buy a law practice, the new firm requires a transition plan. Remember that you should start planning the transition \ process during your due diligence. To make the transition period as smooth as possible, consider the following:

6. Buying a law practice is a complex but fulfilling process

Buying a law practice is a complex process, but it can help you achieve your long-term professional goals. And despite being a time-consuming process, there are many retiring and transitioning attorneys looking for the right person to care for their clients. And that person could be you.

What's Clio?

We're the world's leading provider of cloud-based legal software. With Clio's low-barrier and affordable solutions, lawyers can manage and grow their firms more effectively, more profitably, and with better client experiences.

Why do you need an attorney for a home purchase?

Here are a few reasons you might need or want an attorney to be part of your home buying team: State or lender requirement: Every state has slightly different laws regarding real estate transactions, and some states consider certain actions that are part of the process to be “practicing law.”. These regulations are often meant to prevent real ...

What is a real estate attorney?

A real estate attorney is someone who is licensed to practice real estate law, meaning they have the knowledge and experience to advise parties involved in a real estate transaction, such as a home sale.

Who is in charge of closing a home?

In some cases, a real estate attorney is also the person who’ll be in charge of your closing. In a home purchase transaction, both the buyer and seller can hire an attorney to represent their interests during the process. Or, in the case where an attorney is overseeing a closing where the home is being purchased with a mortgage loan, ...

Is it legal to buy a home?

Buying a home isn’t just a simple purchase; it’s also a legal transfer of a property from one entity to another. Because the legal side of this transaction can be so complex, sometimes it makes sense (or is even required) for home buyers or sellers to enlist an attorney who can look out for their best interests.

Do you have to have an attorney at closing?

If your mortgage lender requires an attorney to be present at closing, whether the buyer or seller covers the cost of the closing attorney will depend on how your contract was negotiated. If you want your own attorney in addition to the one required by your lender, you’ll also pay for any services they provide you.

How to get inside perspective before buying a business?

Before you buy a business, get an inside perspective by asking the seller's permission to sit in on the business for several days. If he or she is agreeable, this can be a great way to find out how the business you want to buy truly operates.

Is a business worth x dollars?

The important point is that a business is not worth x amount of dollars just because the seller says so. The real value of the business depends upon the income that the company generates and how well it's been managing its sales and expenses.

Do you need to specify details in a contract?

Once you and the seller have reached the point of agreement on terms, the details need to be specified in a contract. Because the contract needs to itemize every aspect of the sale, it should be drawn up by a lawyer.

How many acquisition searches end without a successful purchase?

According to research by a team at Stanford University, about a quarter of acquisition searches end without a successful purchase. In other cases, people let emotion or a desire for expediency lead them into buying bad businesses (or the wrong ones for them) or overpaying.

How to meet new colleagues?

As you meet your new colleagues, reassure them that they won’t see any immediate changes. Instead, share your overarching goals for the company—for example, excellent customer service, commitment to quality, a satisfying work environment—and encourage people to stay focused on their work. Also give them an opportunity to ask you questions, but don’t feel as if you should have definitive answers for everything: “I want to learn more about that issue before I make a decision” is a fine response.

What does acquisition entrepreneurship mean?

Acquisition entrepreneurship means instant impact.

How many businesses did Ambrosia consider?

Over a 12-month period, Ambrosia considered approximately 7,500 businesses, from a slaughterhouse to a confectionary company. He indicated interest in 26 and received favorable responses from two before he entered into exclusive negotiations with the seller from whom he eventually purchased his company.

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