Business Sale Lawyers Serving Fairfield County and Western Connecticut
Our Danbury, Southbury, and Westport Team Can Handle the Legal Aspects of Your Business Sale
Every business is the owner’s “baby” that is nurtured from birth, raised through good times and bad, and provides great joy and fulfillment, but will someday belong to someone else.
Selling a business is one of the most momentous events in a person’s lifetime, and, except for serial entrepreneurs, it is a process that most business owners face only once. Because a business is often a person’s most valuable asset, the process of selling demands the utmost care.
Chipman Mazzucco Emerson has helped owners sell countless enterprises, ranging from mom-and-pop operations to sprawling companies worth tens of millions of dollars. Our lawyers have the experience to guide owners from the moment they form the decision to sell to the time they leave the closing table with a check.
If you don’t have a lawyer to assist with your business sale, email a business lawyer at Chipman Mazzucco Emerson today or call (203) 902-4882 to schedule a consultation. We serve entrepreneurs in Fairfield County, Southbury, and beyond.
Selling A Business Involves Far More Than Attending A Closing
Selling a business involves months, if not years, of preparation and effort. The actual closing is usually anticlimactic. Done correctly, the process involves crafting a thoughtful letter of intent, addressing the buyer’s due diligence inquiries , negotiating a detailed agreement on sale terms, and drafting all the required closing documents, among other steps. No two businesses should be sold in exactly the same way. Individual circumstances always come into play.
Nevertheless, some general steps apply in most cases.
Deciding Whether to Sell
Sooner or later, practically every business owner wants to step aside. Whether because of age, illness, financial need or too many seven-day workweeks, many business owners decide to pass the baton.
When no partners, key employees or family members are available to assume control, a third-party buyer may be the answer. The buyer could be a financial investor seeking the best return for his or her capital, but it is more likely to be a strategic investor, someone in the same industry or an allied industry who can combine enterprises for maximum financial benefit.
These days, many companies are sold to private equity firms or to one of their portfolio companies. It is important to know what they are looking for in the sale process.
- Related: Business Succession Planning
How Do I Get My Business Ready for Sale?
Before putting a house or car on the market, the owner would normally tidy it up and make it look attractive. So it is with businesses. Although the precise tasks will vary from company to company, here are common housecleaning tips:
- Be certain that your state corporate or LLC filings are current.
- Bring all corporate or LLC minutes and resolutions up to date.
- Obtain federal registrations for all trademarks and slogans used in promoting your goods or services.
- Secure patents for any essential technology.
- Firm up all contracts with key suppliers and customers.
- Firm up leases for any facilities used in the business.
- Ensure that all tax returns are truthful and accurate and pay all taxes, especially sales taxes, when due.
- Review all financial statements with your accountant to make certain that they comply with generally accepted accounting principles and fairly and accurately reflect the financial condition of your business. Reverse the effect of personal expenditures or cash receipts that may not have been fully reflected.
- Secure employment agreements with key employees, including clauses prohibiting them from competing with your business or soliciting your customers.
- Secure agreements with all employees not to disclose confidential information.
- Make sure your employee handbook is complete and up to date.
How Much Is My Business Worth?
Before you put your business on the market, you should know what it is reasonably worth. After taking all the steps to get your company ready for sale, consult a valuation professional. He or she may have additional tips to make your company even more profitable and valuable.
How Do I Find a Buyer for My Business?
Some sellers will begin to negotiate with the first person who expresses interest without having exposed their business to a large universe of potential buyers. Such a buyer often operates a company in the same or complementary industry.
If the seller does not expose his or her business to a broader market, however, then the risk arises of selling the company at an unfairly low price. An investment banker or business broker can expose your business to the greatest number of prospective buyers.
Am I Selling My Company Or Its Assets?
Depending on how you structure the sale, you can determine what the buyer gets. Many factors come into play, but the sale of a company, as opposed to the sale of its assets, can have dramatically different consequences for the income tax and the liability aspects of the transaction. Tax and legal advisers are essential when sellers confront this issue.
Sales of Business Contract
Virtually every sale is governed by a contract. The seller’s principal focus is usually to make certain they receive payment at closing. Buyers typically want representations and warranties from the seller about the condition of the business. If any turn out to be inaccurate, the seller may have to indemnify the buyer from loss.
What Do I Need To Know About My Business’ Contract Of Sale?
Sellers must be careful about all provisions in the contract that could lead to an erosion of the purchase price. A range of other provisions can also harm the seller, so you should view the agreed purchase price as merely the start of any negotiation with the buyer over the terms of the contract.
What Will the Closing Be Like?
If the seller and relevant advisers take all the proper steps, the closing should be completely anticlimactic. If not, the sale may end poorly or result in eventual lawsuits that can devastate both parties.
Get Your Business In Order If You Plan to Sell
No matter where you are in the process, our attorneys can provide guidance as you decide terms and create the contract of sale. Because of the potential financial and legal consequences of such a large and complex transaction, you must have a lawyer ready to advocate for you. Our business attorneys have been serving Fairfield County and Western Connecticut entrepreneurs for over 40 years and have a wealth of experience we can use to help you.
Selling your business should be a moment of triumph. Let us do what we can to make sure the process runs smoothly.
Call or email our Danbury office today at (203) 902-4882 to schedule a consultation. We can answer your questions and provide guidance regarding your upcoming business sale.
Tailored Legal Solutions
We strive to find the optimal solution for each unique situation. We are well aware of conventional approaches, but we also think outside the box.
Highly Competent Legal Guidance
We will analyze your situation thoughtfully and investigate the relevant law thoroughly to devise a creative solution, customized for your situation.
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We pride ourselves on responding promptly to every inquiry as we recognize that your time is valuable and that your needs are immediate.
Deep Bench of Attorneys
At our firm, our attorneys have over 100 years of combined experience, each able to bring their unique knowledge and skillset to your case.