Selling a business
Contract law regulates the sale of all property, including businesses. In order for a sale to be legal and effective, the agreement must include an offer, an acceptance of that offer, an intention to create a legal relationship and consideration. Consideration is some sort of benefit to the party, and is generally a financial sum. Selling a business should be conducted precisely and in writing to ensure that the terms are fully understood and agreed upon. If you are selling a business you should be sure to involve a lawyer and an accountant so that they can advise you when it comes to making important decisions.
What issues can arise when selling a business?
You need to be sure that the documentation transfers all the relevant assets and liabilities. The assets will include any property, equipment, fixtures, fittings and intellectual property that the business owns. The liabilities will include debts to creditors, and any existing contracts.
You must be careful when making statements about the business prior to the sale, as if those statements are not true they may expose you to an action for misleading or deceptive conduct or misrepresentation.
How can a lawyer help me when selling a business?
Your lawyer will help you negotiate and draft an agreement with the other party. They will examine any offers or terms put forth by the other party and assess their legality and consequences, offering you valuable advice on how best to approach the negotiation. They will also recommend what to put forth in your own offers and any terms you need to include in the agreement.
A lawyer protects your interests by preventing the other party from taking advantage of you in any way and they also help to ensure the agreement reached is legal and enforceable.
How can an accountant help me when selling a business?
If you are selling a business, an accountant will help you prepare your books for the buyer. They will assist you in meeting your reporting obligations and winding up your involvement in the company when the new owner takes over.