Purchasing an existing business offers advantages that are not available for those forming a company from scratch. For example, skipping the start-up phase and cutting formation-related expenses allows entrepreneurs to focus on expanding the existing business operation.
In this article, you will find the essentials of business purchase agreements in Florida.
Buying a Business in Florida Agreement – Full Walkthrough
Buying an existing company in Florida is not as simple as shaking hands with the seller and closing the business. From the initial offer stage to signing the closing papers, each step requires the utmost attention to detail.
The Initial Offer Stage
The first step to purchasing a company is to find a business owner seeking a profitable deal. When the right buyer finds a proper seller, the next step is to negotiate the terms and conditions of the sale.
The guidance of an expert business purchase attorney is crucial to conduct an efficient negotiation and ensuring each party is fully aware of the contractual duties and obligations. Additionally, a legal advisor may help the buyer to prepare a Letter of Intent (LOI).
An LOI anticipates the key terms that will be present in the business purchase agreement, including indemnity clauses, restrictive covenants (e.g., non-compete agreement), and other terms.
Conducting Due Diligence
No matter how well-intentioned a business seller might be, the buyer must proceed in-depth research into the company’s financial and organizational history. The due diligence process cannot be taken for granted, as it will determine the viability of the transaction.
One of the elementary factors involved in this process is to identify whether the business price is valued correctly and the existence of any liabilities that may arise from the transaction. Part of the essential documents required in this process include:
- Commercial leases
- Contracts with suppliers, customers, etc.
- Tax returns
- Balance sheets
- Debt disclosures
- Payroll numbers
- CPA reports
- Reports showing marketing and advertising costs
- Any outstanding debts or financial liability
- Zoning law documents
- Inventory lists
- Any relevant organizational and financial documents
Licenses & Permits
Depending on the company’s segment and professional activities, Florida law may require the acquisition of specific licenses and permits.
In some cases, it may be necessary to apply for licensing at the local, state, or federal levels. It is crucial to ensure a business already has the required licenses and permits to operate legally before signing the purchase agreement.
If not, an experienced legal advisor can help you identify whether purchasing the business is worth the time and expenses involved in the process.
Handling the Closing Process
Closing a business purchase is not as simple as it may sound. At the final stage, it is important to rely on a legal advisor to oversee the process and guarantee full compliance from both parties involved.
The buyer generally makes a deposit in an escrow account. A reliable attorney may also assist in this sense. Before signing the purchase agreement, it is crucial to review all the relevant documents and identify uncertain points that may turn into liability in the future.
Are You Interested in Buying a Business in Florida? – Immediately Seek Expert Legal Guidance
A well-versed legal advisor in business & asset acquisitions, Attorney Romy B. Jurado willingly wants to help you succeed. Contact us today by calling (305) 921-0976 or emailing [email protected] to schedule a consultation.