Buy Sell Agreement
For the purpose of this series, we’ll refer to the party selling the company as the owner, and the party acquiring the company as the purchaser. If you read about these transactions in other blogs or articles you might find the selling party referred to as the target company and the acquiring party as the acquirer.
In the preliminary stages of the purchase and sale of a business there are a few primary concerns: (1) the owner wants to make sure that the potential purchaser is serious, (2) the… Read the rest
The purchase and sale of a business is one of the most important transactions for business owners. We’re starting a blog series to let you know more about how the process of purchasing or selling a business works. As a side note, lawyers often call these types of transactions mergers and acquisitions, especially when referring to transactions involving extremely large companies. Mergers and acquisitions are essentially just the purchase and sale of a business but generally on a larger scale and with more moving parts.
We’re going to discuss the purchase and sale process from start to finish. For each… Read the rest
A Buy Sell Agreement is a legal contract between the owner(s) of a business and the entity, to purchase and sell interests in the business at a pre-determined price if certain future events occur (e.g. death, disability, outside party purchase offer, or termination of employment). The Buy Sell Agreement can help ensure a smooth transition for the entity, remaining owners, and departing owners of a business.
Benefiting the Entity
There are a number of reasons why you may want to have a Buy Sell Agreement drafted for your business. The… Read the rest
Aside from choosing what entity to form your business as, one of the most important considerations in the early stages of forming a company is the exit strategy. Ironic as it may sound, deciding how to get out of the business in the beginning will save you and your business partners time and money down the road. As we’ve discussed throughout our series on LLC Operating Agreements, there is a lot of flexibility when deciding what provisions to include in your operating agreement. It’s no different when… Read the rest
When starting a business and creating a business development strategy, many entrepreneurs and business owners forget one of the most important considerations: the exit strategy. Especially at the beginning, it’s not easy to think about how your business will end. However, when your business is just starting out, it is often the best (and least complicated) time to discuss an exit strategy. At this point, your business is small (in number of employees and cash), there aren’t significant liabilities, and the business has only a few contracts with individuals outside the company. It will become increasingly difficult to discuss exit… Read the rest