questions to ask a lawyer when buying a business

What are good questions to ask an attorney?

Mar 21, 2018 · 43 questions to ask when buying a business. Even before seeking out business advisers, position yourself to gain the most out of the buying process.The following list of 43 questions to ask when buying a business will assist you in making the right decision. We’ve broken down the following list into different categories below. Jump to category:

How to evaluate a business attorney?

Jun 19, 2018 · De Leon says, “Not only do business owners need to seek good legal representation, they also need to secure a good CPA to talk them through the tax ramifications of the corporate structure they choose, business purchases, applicable taxes owners must file once established, and the like. Having good coordination between business owners ...

What should I ask before hiring an attorney?

Sep 26, 2021 · 1. What’s the history of the business? You’ll want to start with a broad overview of the business. How long have they been around, how long has the current owner been with the company, and why are they looking to sell the company? These questions may help you determine if the company is a good fit for you. 2.

How do you know the right business questions to ask?

Jan 12, 2021 · Some of the most important questions to ask include: Why is the business for sale? What does the business’s future look like? (Both in financial terms and its industry). Plus, why the owner believes that is the case. What is the business’s current financial status? Is it declining or rising, and why? Does the business have any outstanding debts?

What questions to ask when buying an existing business?

What should I check before buying a business?

What are 3 questions you should ask a lawyer before hiring?

What are good questions to ask lawyers?

How do you protect yourself when buying a business?

What is due diligence when buying a business?

What lawyers should not tell?

How do I prepare for an attorney interview?

How do I talk to my lawyer for the first time?

What to say to hire a lawyer?

How do you tell your lawyer what you want?

How do you know if your lawyer is selling you out?

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.

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 happens if you don't form a business entity?

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 or is sued, you are personally liable for those obligations.

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.

Do small businesses have trademarks?

All small businesses potentially have trademarks that they use to identify the business and distinguish it from others. Your business name, logo, labels, slogans, and packaging can all be trademarks, but you must take steps to protect them. You may decide to register a trademark with the U.S. Patent and Trademark Office.

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.

Financial

Are the company’s revenues rising or declining? If declining, what is needed to improve them?

Legal

Is the business involved in any ongoing lawsuits, and if so, what are the details? Has it been involved in lawsuits in the past, and if so, what was the outcome?

Market

What is the target market for the business? Is that market growing, stable or shrinking?

Assets

Does the company own any intellectual property, proprietary processes or exclusive products? If so, will the ownership rights transfer to you?

Suppliers

Who are the company’s suppliers? Are the suppliers willing to transfer the existing contracts to you when you take over the business?

Employees

How do employee wages compare to the industry average and to average wages in the local marketplace?

Do you need a lawyer for a business?

Once your business starts working with vendors, suppliers, clients, or any other third parties, you’ll need written agreements in place to ensure that all parties involved know what to expect. A lawyer can help you draft specifics or at least walk you through the creation of some templates that you can use in common situations.

What are the legal ramifications of starting a business?

There are several legal ramifications of starting a business. It can lead to issues related to liability, copyright, employee rights and everything in between. So one of the first steps you should take as you work to get your business off the ground is speak with an experienced business attorney.

Who is Ben De Leon?

Ben De Leon is the President of De Leon Washburn & Ward, P.C., where he has served as general counsel to some of the fastest growing companies in Texas. As an experienced business lawyer, he recently spoke with Small Business Trends about some of the most important legal issues that new entrepreneurs should discuss when getting started.

What happens if a business has an outside investor?

If your business has any outside investors, it could impact the type of corporate entity you’re able to establish for your business. Specifically, you need to be sure that the structure provides a corporate shield for your investors as well as yourself.

What is a corporate shield?

Only by establishing a corporate entity and following the necessary corporate laws and regulations do small business owners enjoy what’s commonly known as a “corporate shield” that protects their personal assets and ensures only their business assets are at play.”.

How to buy a business?

Aside from the above, a person looking to buy an existing business should complete the following: 1 Know exactly why they want to buy a particular business; 2 Have a business plan that proves they can maintain the business’s success; 3 Figure out how much money they will need to purchase the business, and how much money they will need to continue covering business expenses (e.g., payroll, utilities, etc.), after they purchase it; 4 Request to see the existing business’s current financial, legal, and other important documents, including:#N#Bank statements (if possible);#N#Tax returns from the last three to five years;#N#Legal documents, such as contracts, liens, pending lawsuits, outstanding debts, leases, registered intellectual property, licenses, permits, and so forth;#N#A list of inventory, fixtures, furniture, machinery, etc.#N#A list of current clients; and/or#N#Their current business, marketing, and advertising plans (if any). 5 Obtain a credit report and inquire with the Better Business Bureau about the business; 6 If possible, speak to the business’s customers and suppliers to gather as much information as possible about its reputation and operations; 7 Hire an accountant to review the business’s financial data (e.g., gross profit ratios, net income, total assets, etc.); 8 Research the business’s social media presence and how it is rated on review websites (e.g., Yelp!); and 9 Finally, if the purchaser is genuinely serious about buying, they should hire an official due diligence team that consists of a broker, banker, accountant, and an attorney.

Is it risky to buy an existing business?

Additionally, purchasing an existing business is not as risky as opening a brand new business. For instance, since existing businesses typically have verified customers, a network of professional contacts, and a financial history, it can make securing any necessary funding easier (e.g., business loans, investments, etc.).

What documents are needed for a business?

Request to see the existing business’s current financial, legal, and other important documents, including:#N#Bank statements (if possible);#N#Tax returns from the last three to five years;#N#Legal documents, such as contracts, liens, pending lawsuits, outstanding debts, leases, registered intellectual property, licenses, permits, and so forth;#N#A list of inventory, fixtures, furniture, machinery, etc.#N#A list of current clients; and/or#N#Their current business, marketing, and advertising plans (if any). 1 Bank statements (if possible); 2 Tax returns from the last three to five years; 3 Legal documents, such as contracts, liens, pending lawsuits, outstanding debts, leases, registered intellectual property, licenses, permits, and so forth; 4 A list of inventory, fixtures, furniture, machinery, etc. 5 A list of current clients; and/or 6 Their current business, marketing, and advertising plans (if any).

What is an asset purchase?

Generally, the purchase or sale of an incorporated small business will be in the form of either: an asset purchase, where the buyer purchases some or all of the seller's assets. This transaction is often favored by buyers because you get the assets, like equipment and inventory, without taking on the seller's debts and liabilities. ...

What is the difference between a stock purchase and an asset purchase?

an asset purchase, where the buyer purchases some or all of the seller's assets. This transaction is often favored by buyers because you get the assets, like equipment and inventory, without taking on the seller's debts and liabilities. a stock purchase, where the buyer purchases all or most of the seller's stock and "steps into the shoes" ...

What should a letter contain?

Typically, the letter should contain: how long the buyer and seller are willing to keep the deal open. a binding promise by the purchaser regarding confidentiality of the seller's trade secrets, like customer lists and other sensitive company information. a binding promise by the seller not to negotiate a sale with any other prospective purchaser ...

What is a formal final agreement?

A formal, final agreement is the culmination of the negotiations. It contains all the details of the deal: the price, the terms of the deal, when the business or assets will be turned over, whether they will be held by an escrow agent, and other important items. Usually, the agreement goes through many drafts and is finalized for ...

What is a binding promise?

a binding promise by the purchaser regarding confidentiality of the seller's trade secrets, like customer lists and other sensitive company information. a binding promise by the seller not to negotiate a sale with any other prospective purchaser for a certain period of time.

Questions About The History of The Business

Questions About Selling Price

Questions About Day-To-Day Management

Miscellaneous Questions

• 27. What Licenses or Permits Do I Need to Get?
  You’ll want to make sure you comply with the law. Also, find out how many of these licenseswill transfer over to you.
• 28. Are There Any Pending Lawsuits?
  If legal matters are hanging over the business’s head, this is definitely a red flag. Issues like that can quickly drain you of your financial resources.

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Conclusion

General

Financial

Legal

Sales/Marketing

Assets

Suppliers

Employees