Don't Try to Navigate the Legal System Alone

Business Litigation- Selling Your Business

Business Litigation - selling your business. Do's and don'ts selling your business exist. Ignore them at your peril. They can easily lead to litigation for the unwary. The most important "DO" is to contact an attorney before you sign the purchase and sale agreement. These agreements need to be carefully drawn to protect a seller. Often a Buyer will present an agreement drawn by his attorney to the Seller. At first glance,the agreement may look to incorporate the "deal". Don't sign it before you take to a lawyer to review. By the time you sign it, it's often too late to do anything about it.

The most glaring example involves the Buyer giving the Seller a promissory note payable over serveral months. That note should be collateralized by no less than that which is being sold which allows the Buyer to step back into the business before it is driven into the ground.

The promissory note should be either signed by individuals as the Makers of the note or at least personally guaranteed if the Buyers create a legal entity to execute the note as Maker.

The Landlord will have to agree to either an assignment or sublease of the business premises if the Seller is a Tenant. That is another reason the promissory note should be guaranteed and collateralized. There's nothing worse than having to pay a lease for a business you don't own.

These are only a few of the reasons to use a lawyer when you want to sell you business. Protect yourself from business litigation when you sell your business.

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