When you would like to explore purchasing an existing business, it’s important to conduct proper due diligence to make sure you’re making a sound investment. Purchasing a business could mean you are also buying various other items, such as real estate and equipment—along with debts and tax obligations.

Actually making a purchase requires addressing another set of issues, including whether you should acquire the company’s assets or purchase a controlling interest. The latter allows you to take over operations of the business, for example, but you will also be fully responsible for taxes and outstanding debts.

In addition to advising on your best steps moving forward, I also help you set up comprehensive non-compete agreements and other necessary contracts to prevent the seller from potentially opening up a new business and competing with you directly.

Selling the company you’ve put so many hours into can be a challenging process, and there are a number of legal considerations you may need to make as you move ahead with a prospective sale. This includes the following:

• Reviewing books
• Nondisclosure agreements
• Letter of intent

In addition to these items, the sale of a business often involves addressing issues like non-compete agreements, employment contracts, escrow and tax planning.

Most buyers will want to review your financial documents, contracts, personnel files and other corporate records. This usually works when the buyer provides you with a due diligence list. I’ll work with you to ensure your records are in the best condition possible for this process.

Prior to entering into any negotiations, be sure that you have the other party sign a nondisclosure agreement, which will help secure any confidential data or information. If a sale does not end up happening, the agreement should state that any confidential documents should be returned to you right away.

This letter includes general terms of a potential sale and represents a non-binding offer from the prospective buyer. Common items included in this document are closing conditions, the purchase price, how the transaction will take place and the closing date.