How Can a Business Acquisition Attorney Help Clients?

How Can a Business Acquisition Attorney Help Clients?

Some different challenges arise during a business acquisition. An experienced business lawyer will be able to advise clients on how to best address these challenges. For example, the tax treatment of the assets and stock purchased can have significant consequences. The tax treatment can also be affected by licensing obligations to state and local governments. 

Buying An Existing Business

When you are thinking of buying an existing business, there are several things you should know. Buying a business is usually much easier than starting it from scratch because the previous owners have already done much of the hard work. The business may already have a working staff, a physical location, and a customer base. Buying an existing business can also save you time and money. However, you should research the business carefully before making a decision. The first step in buying a business is gathering information about the business and its current owner. This includes reviewing the business’s bylaws and articles of incorporation, as well as minute books and certificates of good standing. You also want to talk to the current employees of the business. This information can help you gain a realistic perspective of how well the business is doing. It is also vital to gather a list of existing customers, which will help you determine whether you’ll be able to retain them after the purchase. Purchasing an existing business is often an excellent way to expand your current business or enter a new industry. Most prospective buyers, even mergers research a business acquisition attorney near me for easy access and consultation. They believe that though it may be in poor condition, an existing business often has a proven track record and structure. It is often much easier to buy an existing business than start a new one from scratch. 

Getting Financing For An Acquisition

If you’re in the market for a business acquisition, you’ll need to determine how much money you need. Fortunately, there are several ways to secure financing. You can apply for a business equipment loan to cover some of the acquisition costs. A bank loan is also an option for partially funding the acquisition. A prospective lender will want financial information about the new business. If the business is profitable, the lender will be more likely to approve the loan. However, a lender may be less willing to approve the loan application if there are any redundancies or questionable credit. When a business owner decides to acquire another business, getting financing for the acquisition can be difficult. This type of financing often requires a personal guarantee and a down payment. However, finding lenders willing to work with nontraditional lending standards can be possible.

Inheriting Debt When Buying A Business

When buying a business, it is important to understand how much debt the seller has. This will help you determine whether you are getting a good deal. However, you may have to worry about PPP loans because the SBA may not forgive them. The SBA recently issued a procedural notice on handling outstanding PPP loans. Another type of debt that may be inherited is that of a business owner. A business owner may leave it with some debt, such as a line of credit or a credit card account. When the owner dies, the business will continue to owe the lender. The heirs may not be personally liable for the debt, but they must manage it. Another option is to buy a company with debt. In such a case, the seller might set a higher price for the company, pay off the debt, and pass it on to the new owner. This is known as a debt-for-equity swap.

An Attorney Reviews The Terms Of The Agreement

When drafting transaction documents, gathering all the relevant information from both parties is important. For example, a seller might have financial reviews or detailed documentation. This information will be very helpful for a lawyer who can clarify details before drafting the documents. A lawyer can also draft the terms of the agreement in a narration, outline, or list form, which will help clients focus on the details. A lawyer can also identify issues the parties did not explore or address. A business acquisition attorney will also conduct due diligence on the target company, including reviewing the tax implications and determining the next steps. They can also analyze regulatory hurdles and obtain necessary regulatory approvals. 

By John Toroff
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