Selling a business is a significant milestone in the business’s life. It is a stressful time for all involved, whether it’s the change of lifestyle or career. Finding the right buyer is crucial to ensure that all parties are satisfied with the deal. The process involves a myriad of financial and legal aspects, including the setting up of financing and ensuring that the debts are paid off in the transfer of contracts and agreements, as well as communicating with employees customers, suppliers, and the general public about the sale. Legal counsel can help you evaluate potential buyers and negotiate the terms.
Before you sign a contract, it is important to know what a company is worth. The value of a company is determined by its financial performance, cash flow and competitive advantages. You should avoid selling the business in an economic downturn since the market will not support it.
You should also think about the motives that led to the owner’s decision to sell, since this will give you insight into their motivation and priorities. A business that has low profits or a bad reputation, or an opponent with new technology, for example could be a sign of underlying issues the seller is unaware of.
Before agreeing to the sale, you need to have a UCC lien check to ensure there are no outstanding debts to the new owner. It is also helpful to look over leases, contracts and other agreements to ensure they are correct and in order.
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