Buying a business entity or the assets tied to one can be exciting, but it can also be a process filled with confusion if you don’t have the right lawyer at your side to help keep you informed.
Approaching the process of purchasing a business is an exciting prospect but it is one that should be handled with care and the guidance of an experienced Arizona business attorney. The majority of businesses today are purchased using the asset purchase method.
The primary reason that smart buyers request an asset purchase is because they do not want to take on the responsibility of the entity’s liabilities. Many buyers are not willing to assume these liabilities and choose to pursue asset purchase instead to protect themselves. The general ground rules with regard to any asset purchases is that any buyer is liable only for liabilities that have been assumed specifically in the purchase agreement.
A buyer that accumulates all of a corporation stock has the burden of all the liabilities of that corporation whether they are unknown or known.
The entity in general is not affected by the sale of the owner’s interest, which means that the company still maintains accountability for all employee issues, contracts, tort liabilities and lease obligations. This is true for any other obligations of the entity as well.
When considering purchasing the assets of a business, it is strongly recommended that you negotiate with the seller as far as what company liabilities, if any, you will be comfortable assuming and be liable to satisfy after the closing agreement has been reached. Your asset purchase agreement should detail these requirements specifically. Consulting with an Arizona business attorney to ensure that your rights are protected and that you have an agreement that meaningfully reflects what you intended is important. Get help from a knowledgeable Arizona business attorney immediately.
A lawyer can review all of the documents linked to your purchase to ensure that you’ve considered every scenario. Simply accepting the presented materials as in your best interest could be a big mistake. A business purchase is a big investment, making it worthwhile to have a lawyer’s counsel throughout.