Orange Park Purchase or Sale Business Attorney

David A. King, Attorney at Law

1416 Kingsley Avenue

Orange Park, FL  32073

(904) 269-6699


Purchase or Sale of Businesses

 

OVERVIEW

       We have over thirty (30) years of experience, representing both Buyers and Sellers, of businesses and professional practices (Doctors, Dentists, Veterinarians, etc.). We have handled everything from the simplest “mom and pop” business, up to and including automobile dealerships, and everything in between.

      
If you are planning to sell your existing business or professional practice, or if you are planning to buy your first business or professional practice, this will probably be the largest (in dollar value) transaction, and the most complicated (terms, provisions and details) legal transaction, of your life.

      
If you are a Seller, at the end of the transaction, you would like to be assured that you will ultimately receive the full cash value of your business, and without continuing liability to the person(s) now attempting to run your former business.

      
If you are a Buyer, at the end of the transaction, you would like to be assured that you have received everything that you paid for, without any surprises, and without any liability for whatever the former owner might have done in the past.


 

HOW THE PROCESS TYPICALLY WORKS

 

       STEP 1:  At the first office conference, we try to collect all of the details of the proposed transaction, that are known to date, and from that discern what further details need to be uncovered, or are yet to be agreed upon between the parties.  We will discuss strategy and options.

       STEP 2:  If appropriate, we will draft and prepare a “Confidentiality Agreement”, to be signed by both parties, to protect both the Buyer and the Seller, in regard to personal, financial, business or other confidential information that may be disclosed to each party during this process.

       STEP 3:  At this step, or sometimes after the next step, the Buyer will need to do his or her “due diligence” on the Seller’s business books, records and tax returns.  This is a two step process; first, the Seller provides to the Buyer the business’ tax returns and financial statements; second, the Buyer’s accountant will visit the business (on site) and review the actual books and records, in order to verify the accuracy of the financial statements and the tax returns that have been supplied to the Buyer.

       STEP 4.  We always start with a “Letter of Intent”.  Either side can initiate the Letter of Intent, and both sides sign it.  Typically, it is short . . . . . . no more than two pages.  Its primary purpose is to determine if the two parties are close enough on the major issues to make it worthwhile to proceed.  For instance, it does not make sense to put all of the necessary time and effort into a twenty or thirty page “Purchase and Sale Agreement” (Step 5) if the Buyer and Seller are a mile apart on the purchase price.

       STEP 5.  Now that we feel confident that the Buyer and Seller are close on the major issues, we will begin to draft the “Purchase and Sale Agreement”.  This document will frequently run from twenty to thirty pages, or more.  The transaction is now proceeding seriously.  This is a critical document and contains all of the details of the transaction.  Typically, at this stage, we find that our Client becomes overwhelmed and/or awestruck as we uncover all of the details that need to be discussed, investigated, resolved and/or agreed upon.  It is usually more than they anticipated.  Fortunately, we are good at it.

          STEP 6.  After the parties have both signed the Purchase and Sale Agreement then the Buyer will start applying to various financial institutions in order to acquire financing for the transaction.  The Buyer may have started the search for financing at an earlier stage; however, lenders will not take the Buyer seriously until they have a signed Purchase and Sale Agreement in hand.

        STEP 7.  We now create a long “to do” list that contains all of the items, issues, facts and details that need to be counted, inventoried, searched, investigated, verified, researched, prorated, or paid off.  Simultaneously, we will begin drafting the Closing documents.  Our Closing document checklist contains sixty-three (63) items; however, we do not use every one of these documents for every Closing.

        STEP 8.  The “Closing”.  After everything on our “to do” list is completed, and after everything on our document checklist is drafted, we will schedule the Closing, where the documents are all executed, money changes hands, and the Seller turns over possession to the Buyer.

       This is an overly simplified explanation of a complex process.  It would take a book to cover every detail of the process.  Making the process work correctly requires an acute attention to details.  We have the experience.

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