The basics you need to know to sell your business.

Lawyer Up, But Don’t Lay Down

There are many legal considerations to review when selling a business. Your best insurance against a bad deal is a good lawyer. They aren’t cheap, but a lawyer who specializes in mergers and acquisitions will guide you through process and look out for your best interest. However, you’ve got to remember that your lawyer isn’t the one selling the business. You are in the driver’s seat and you need to weigh the pros and cons of a particular deal structure. Sellers have plenty of options when it comes to how they try buy your business. Some sellers pay cash and ask you to leave. Some sellers structure earn-outs and give you a piece of the upside. A good lawyer won’t tell you what to do, they’ll help you consider the benefits and risks of reach deal type and help work out the details within the deal type you choose.

Contracts and Organization

If you found a good lawyer, he or she will know what contracts are needed based on the deal type. Depending on the deal type you may need to restructure your legal entity, draft a new operating agreement, bill of sale, asset purchase agreement, security agreement, licensing agreement, or even an employment agreement. We encourage sellers to keep it simple and straightforward. Make sure you have the contracts you need, but don’t go overboard. Legal back and forth can bring a deal to a standstill; tying up your money, mindset, and emotions. Make sure your lawyer knows your goal is to keep things moving and get your business sold.

If you would like more information about deal structures to consider when selling your business, download “The Incomplete Guide to Selling Your Business” here