BUYING AND SELLING A BUSINESS
LEGAL SERVICES FOR BUYING AND SELLING A BUSINESS IN ATLANTA
WE HAVE SOLD OUR CLIENTS’ BUSINESSES TO THE TOP TECHNOLOGY PURCHASERS IN THE WORLD. WE UNDERSTAND WHAT THEY ARE SEEKING, AND CAN HELP YOU EFFICIENTLY NEGOTIATE A GOOD, FAIR, AND FIRM PURCHASE PRICE. BUT NO LAWYER CAN GET YOU THE BEST PRICE AT THE LAST MINUTE.
The best-case scenario is for The Fernandez Law Firm, P.C. to represent your business from the time of corporate formation, so that, among other things, we can ensure that the business is properly formed, there are no shareholders or members who can extort your deal, there is no potential litigation or other hazards, the employees and contractors are locked down, the intellectual property is all properly assigned, and the revenue contracts are all secure.
The reason your business needs these things is because the purchaser will want all of them, and if you do not have them, the purchaser will be unwilling to pay top dollar. The purchaser will want a clean due diligence box of all your constating formation documents and all contracts, as well as all of your accounting and tax documents. In either an Asset Purchase Agreement or a Stock Purchase Agreement transaction it is very important that things be organized, orderly, and complete, and if they are not, it can derail the entire deal.
If The Fernandez Law Firm, P.C. has not represented you from the outset, we can, given enough time, assist you with these matters. If we can get everything cleaned up before a potential purchaser arrives, then the Client-seller is in the best possible situation to negotiate the highest possible purchase price. If the matters are cleaned up after the negotiation begins, it is more difficult to negotiate the highest purchase price.
The first step when there is a real purchaser interested in your business is a full background check of the purchaser. Here’s why: don’t waste your time and legal fees on an unscrupulous purchaser, or a purchaser who may not have the funds available to close the transaction.
Clients often do not want to do a background check of their potential purchasers — but we suggest a full background check. These background checks by our Clients have revealed surprises, such as financial incapacity of the potential purchaser to pay the purchase price; an ankle bracelet on a potential purchaser (awaiting sentencing at a federal facility; as well as a bankruptcy filed a week earlier, which led us to uncover serious fraudulent activity; and in one case, a large federal criminal takedown. These background checks were inexpensive relative to the attorneys’ fees connected with selling the business, and far less expensive than getting tied up with someone who had significant, undisclosed financial and criminal problems.
The second step when there is a real purchaser interested in purchasing your business is entering into an enforceable non-disclosure agreement. You do not want your business information to become public information, or to become the information of a potential competitor. It is relatively easy for a competitor to feign interest in an “acquisition” or “joint venture” — when all the competitor really wants is to look at your customer list or other intellectual property. These are all things we have seen as counsel. The Fernandez Law Firm, P.C. can quickly draft or review any NDA or confidentiality agreement your business may require.
Next steps include preparation of the Letter of Intent (the LOI), the due diligence box, and negotiations of the closing documents. The Fernandez Law Firm commonly prepares most due diligence and engages in most business sale transactions.
A business sale can be a lengthy process. You should anticipate that once the Letter of Intent is signed, it will be at least four weeks before the transaction is closed, and it may be longer, depending on the what the purchaser requires. We do not recommend earn-outs, or payment terms that depend largely upon the success of the business after you are no longer operating your business.
WHEN WE REPRESENT A PURCHASER AS OUR CLIENT, THE FIRST THING WE COUNSEL IS TO RUN A FULL BACKGROUND CHECK ON THE SELLER AND ITS PRINCIPALS, FOR ALL CREDIT REPORTING, LIENS, AND LITIGATION. THIS IS AN INEXPENSIVE WAY TO QUICKLY HELP DETERMINE ANY TROUBLE AND DISHONESTY IN SELLERS AS WELL AS POTENTIAL PROBLEMS IN THE BUSINESS, EVEN BEFORE ENGAGING COUNSEL TO BEGIN NEGOTIATING, DRAFTING, AND PREPARING TERMS AND DOCUMENTS AND ENGAGING IN DUE DILIGENCE.
We also counsel executing a Letter of Intent (LOI) and a Nondisclosure Agreement (NDA). In this way, the parties can have a sense of the purchase price, terms, and timing. A nondisclosure agreement can help maintain the confidentiality of the transaction, which is helpful in many aspects, including with the seller’s and purchaser’s employees. The Fernandez Law Firm, P.C. commonly prepares Letters of Intent and Nondisclosure Agreements.
The Fernandez Law Firm, P.C. will negotiate and/or prepare all Asset Purchase Agreement or Stock Purchase Agreement documents, as well as all exhibits, and other required documents. In the representation of purchasers, the due diligence is very comprehensive and requires a lot of time to track down the performance of every contract, and all accounting. You should anticipate about two months from the time the Letter of Intent is signed to the time of closing.
Businesses we Represent
BUSINESSES WE TYPICALLY WORK WITH
ALTHOUGH WE REPRESENT A WIDE ARRAY OF DIFFERENT TYPES OF BUSINESSES, BELOW IS A LIST OF THE TYPES OF BUSINESSES WE TYPICALLY WORK WITH.
- Medical doctors and physicians’ practices
- Information Technology and IT Companies
- Engineers and scientists
- Enterprise content management
- Resellers (VAR, OEM)
- Foreign businesses doing business in Atlanta, the State of Georgia, and the United States
Our Firm is professionally well-regarded in mergers and acquisitions, and has taught Continuing Legal Education and seminars in Mergers and Acquisitions to other legal professionals. The Fernandez Law Firm, P.C. has been recognized for excellence and has consistently won the highest awards and the highest customer approval rating from Martindale-Hubbell and Lawyers.com for quality of service, overall value, responsiveness, and communication ability for the years 2013, 2014, 2015, 2016.