The decision to sell your business is significant and shouldn’t be taken lightly. You’ve sacrificed your blood, sweat, and tears to establish and operate your business. If you’re starting to consider selling your business or have already decided that you will be selling your business, it’s important to work with an experienced business attorney.
The business attorneys at Woods Lonergan PLLC have helped many New York City business owners successfully sell their businesses. Our attorneys are skilled at every stage of the business sales process. We can help you monetize the sale at a price point and on terms to your advantage. Contact Woods Lonergan today to schedule your free case evaluation and learn more about our business selling legal services.
How Working with a Business Law Attorney Can Help You
At Woods Lonergan, our attorneys understand the business environment in New York City. We know the key players and have helped many local businesses expand. We’ve assisted a wide range of companies in sales, including those wanting to acquire franchises, mom-and-pop businesses, large commercial businesses, and more.
We’ve also assisted business owners who want to expand their businesses through a merger with an existing company. Whatever type of business sale you’re facing, the attorneys at Woods Lonergan have the knowledge and experience to make the transaction as smooth and advantageous for you as possible. Some of the legal services we provide to clients who are selling a business include the following:
- Gathering documentation before the sale of the business
- Reviewing all the books and records to address any potential problems that the buyers may bring up during the due diligence process
- Analyzing the tax implications of selling a business
- Ensuring that employee files, contracts, and other documentation are current
- Advising the business owner about when and how to disclose any negatives in the business, such as pending litigation
- Working with business appraisers who can provide an accurate evaluation
- Representing the seller and negotiations over the evaluation, terms of payment, and other matters
- Drafting a purchase and sales agreement
- Ensuring that the sale complies with all requirements for selling businesses under New York law
Determining the Value of The Business You Are Selling
For those considering selling their business, determining the value of the business can be a helpful step. The good news is that you don’t have to determine the value of your business yourself. At Woods Lonergan, we have an extensive network of financial professionals and assessors who can assist with providing an accurate valuation of your business. Our attorneys regularly work with these professionals to determine the fair market value of businesses. In order to enhance the valuation of your business, it’s important to showcase you are a businesses profitability, including:
- Positive trends in cash flow
- Strong target customer base and following
- Sustainable income, preferably through guaranteed contracts that are in place
- Substantial supplier, vendor, and partners spanning several years
How To Prepare For Selling Your Business
Once you’ve decided that you’d like to move forward with the sale of your business, we can help you assemble all the documentation you will need. You will need a profit and loss statement for at least three years, all of your federal and state income tax returns, and an inventory of all of your equipment and fixtures. You will also need to gather the following documents:
- Your lease or rental agreements
- Contracts for goods, suppliers, and equipment
- A franchise agreement, if applicable
- Your current client contracts
- Any outstanding indebtedness, including your payment and balance schedules
- Employment information that identifies your key personnel
- Ownership, organizational, and formational documents
- Information about investors or shareholders
Transferring Ownership of Your Business
New York law recognizes several different ways to transfer ownership of your business to another person or business. There are different tax implications that will play out depending on the legal structure of your business. For example, if you own a partnership, the tax implications of selling your business will be different than if you own a corporation. Accountants and attorneys can help you understand the pros and cons of business ownership transfers and when might be the best time to sell your business.
You may decide that you would like to continue to own your business, but lease your business, allowing someone else to run it for you and make monthly payments to you. If you aren’t sure whether you’re ready to sell your business outright, but you would like to be less involved with the day-to-day operations, a lease agreement may be beneficial.
Another option is to use a gradual sale option. You will lease your business for a specific time frame. At the end of the specified time frame, the buyer will own the property outright. In an outright sale, you will transfer complete ownership to another person outright. The buyer and seller need to sign a valid purchase and sales agreement.
Business Sale Disputes
In some cases, even when both parties have engaged in due diligence, a dispute can arise during the business sale process. The attorneys at Woods Lonergan have experience representing business owners who become involved in sale disputes. At the first indication of a dispute, the business owner should take legal action. The sale of a business is a significant financial transaction. Each purchase or sale dispute case requires extensive research and planning.
Many disputes involve tax considerations. We frequently consult with professionals with experience in these matters. Our attorneys carefully review purchase agreements, invoices, and documents to fully understand the legal dispute and advise our clients on the best legal strategy to resolve the dispute. The majority of business sale disputes are resolved out of court, but if litigation becomes necessary, our trial-ready attorneys are prepared to litigate on your behalf.
Contact Our New York City Business Sales Attorneys
Selling your business can be complicated, but working with an attorney can help you go through the process smoothly. Whatever the reason you’re selling your business, the commercial litigation attorneys at Woods Lonergan can help you protect yourself. Contact Woods Lonergan today to learn more about how we can represent your best interest during the business sales process.