Business Sale & Purchases Attorney Based in New York
The Sale of a Business
The Purchase of a Business
Martha Dwyer has been helping clients buy and sell businesses in the New York City area and throughout the United States for over 35 years.
The Sale of a Business
The sale of a business is not simple. There are many factors to consider when selling a business, including an exit planning in some instances. The initial concerns are the valuation of the business and determination of its strengths and weaknesses. That means that due diligence is necessary. The seller will also need to understand the business well enough to know what representations, warranties and indemnification they can give. NEARLY EVERY BUSINESS DEAL INVOLVES AN ALLOCATION OF RISK. A seller must be aware of the risks and determine what risks it is willing to assume.
A very important issue is the type of consideration to be paid – cash, stock in the buyer or combined business after sale or a combination of the foregoing. It is crucial that tax implications be considered at the outset of any business sale. Martha M. Dwyer brings a wealth of experience in facilitating business sales, but she is not a tax lawyer. However, she understands the importance of tax considerations in business sales and routinely collaborates with tax specialists during such engagements to ensure a comprehensive evaluation of all aspects of the deal.
Once these basic determinations have been made, it is time to seek potential buyers, obtain offers and evaluate them and negotiate a non-disclosure agreement, a term sheet or letter of intent, and then a definitive agreement. When negotiating these documents, the seller will need to have them drafted or reviewed by an experienced attorney to ensure all of their terms provide maximum protection.
“Marty Dwyer represented me when I sold my main business. I had just parted ways with my previous attorney, who had worked on the sale for over a year. Marty came in and saved the sale over many intense months during the last half of 2018 and early 2019, and after the closing when a significant post-closing adjustment dispute arose”*
The Purchase of a Business
Purchasing a business can be a lucrative transaction for all parties involved. Those seeking to purchase an existing business should be aware of the processes, procedures, risks and due diligence associated with buying a business.
The main concerns include the valuation of the business, its potential to generate revenue, the potential to expand the business and the risks the buyer may encounter.
That means that due diligence is necessary to get to a proper valuation and evaluate risks. You will need to understand the business well enough to know its strengths and weaknesses and what representations, warranties and indemnification you will need. NEARLY EVERY BUSINESS DEAL INVOLVES AN ALLOCATION OF RISK. A buyer must be aware of the risks and determine what risks it is willing to assume.
The buyer will also need to consider whether it wants the seller to be involved in the business after it is purchased, usually through a consulting agreement and/or an equity interest in the business, and how much it wants to limit the ability of the seller and its key employees to compete.
A very important issue is the type of consideration to be paid – cash, stock in the buyer or existing business after sale or a combination of the foregoing. In paying cash for a business, whether or not in combination with stock, it is often necessary for the buyer to obtain funds from an outside source (financing).
This can be in the form of a loan from a bank or other third party or by obtaining funds from investors in exchange for an ownership interest in the business being purchased, or a combination of the two. Financing can also be obtained for the business being purchased and another business owned by the buyer which can be combined, by merger or otherwise, with the new business.
Once these determinations have been made, it is time to enter into discussions with the seller and sources of financing, if any, negotiate non-disclosure agreements, term sheets or letters of intent with the seller and the sources of financing, and then a sales contract and financing agreements. When negotiating these documents, you will need to have them drafted or reviewed by an experienced attorney to ensure all of its terms provide you with maximum protection.
Martha Dwyer can help reduce your risk profile and maximize the benefits of your business sale or purchase.
“In my time as Corporate Secretary of a publicly held company on the American Stock Exchange, we did a series of spin-offs, acquisitions and disposals. It was generally accomplished under the direction of Marty Dwyer who never missed a beat, kept us out of trouble with our multitude of business dealings, all the while staying calm and collected despite many long nights of negotiations that eventually turned successful”*
*Prior results do not guarantee a similar outcome