Key Legal Issues to Consider Before Selling Your Business
Understand common legal pitfalls to avoid before selling your business. Identify potential red flags that may arise during due diligence and learn how to address them in your exit planning. Excerpted from BizBuySell's Guide to Selling Your Business.
Transcript:
To address unresolved issues that affect the legal condition of your business, seek legal advice as you examine and plan to address the following issues.
Patents that will be part of the business sale must be current. The lease for the business location must be current, assignable, and transferable. The business must be clear of any zoning regulation violations. Any legal claims, incumbrances, or leans against the business, should be cleared prior to the sale offering.
Pending or unresolved lawsuits must be concluded before the sale or disclosed early in the selling process long before due diligence discovery.
If your business has faced or faces employee related issues, be prepared to disclose the problems and outline the steps taken to preclude similar issues in the future.
If your business has had regulation or law violations or environmental or safety compliance issues, the expenses will be yours to address.
Be sure all licenses are up to date. Be sure any necessary third-party consents to your sale will be easily obtained.
Use the business sale documentation checklist in the digital toolkit, along with advice from your attorney and broker, if you are using one, as you compile the necessary information.