October 22, 2020
The Importance of a Hiring a Pro-Business Attorney
By Achim Neumann
Legal counsel, per definition, should always protect its client’s best interests. However, if you are in a business purchase or sale process, they should also be aware of certain demands or stances that could seriously impact outcome final transaction closing.
An ideal attorney should be deal-friendly and have a transaction-wise mentality in order to make sure expectations are met. If you are transparent with your lawyers regarding how interested you are to close the deal, they should be more thoughtful and attentive that their buying or selling requirements are not too outrageous or complicated for both sides.
See below for some of the key aspects that your legal counsel has to consider in any buying or selling process:
- That both sides thoroughly understand the transaction, that is, the business being purchased or sold;
- That all corporate records, financial statements and regulatory duties are complete and up to date;
- That all current insurance policies and agents are described and available.
If you are dealing with a partnership or any other business structure with more than one owner, there needs to be one appointed representative that speaks for the group, and such representation should be in a written and signed form by all owners or stockholders.
It is crucial that the buyer and the seller both have the same clear understanding of the terms of sale and its details. Therefore, good communication between the buyer and seller is one of the main priorities, as either side, while having their own perception of the deal, can sometimes not understand completely who’s getting what, as a small misunderstanding can completely doom the sale.
The relationship between each party and its attorneys should be completely transparent, confidential, and they should always express how interested they are in closing the deal. No assumptions or unilateral decisions should be made by lawyers without consulting their clients, and if an issue needs to be addressed, it has to be before any final decisions are made. Sometimes, even after the offer is signed, mistakes are made when attorneys from either side assume that everyone else is doing their part and then the process becomes more complicated with now unaddressed issues. Without realizing, a small misunderstanding can make the other side angry, damage therefore cannot be contained, and the sale is unfortunately never going to close.
The issue of having to deal with business lawyers can be mitigated by utilizing the services of a professional business broker firm. Throughout years of operations, business brokers have a wide network of qualified transaction attorneys, and a good business broker will give each party always three attorney referrals to be interviewed. Additionally, with enough previous experience and knowing the entire operational processes, they can make the entire sale much simpler for both sides, while simultaneously, being an independent mediator to the deal. In any case, it’s good to remind that it is essential that both sides have the same understanding and approach to the sale in order for it to happen.
About A Neumann & Associates, LLC
A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or firstname.lastname@example.org