Starting a new company from scratch is an exciting experience for those with an entrepreneurial genetic pool. However, buying an existing business allows entrepreneurs to enjoy reduced startup time and seize advantage of a proven business model.
In this article, you will discover how to buy an existing business in Florida.
How to Buy an Existing Business in Florida – What You Need to Know
Determining Which Assets Are Included in the Business Purchase
A business purchase generally includes all the equipment, inventory, and assets required to operate a business. The business purchase agreement must have a precise list of the assets included in the transaction.
Fine-tuning this important aspect from negotiation to the signature of the closing paperwork can be complex. The best strategy is to work with an expert business purchase attorney to guarantee a profitable deal.
Identifying the Obligations Assumed in the Contract
When you sign the papers to become the owner of a new business, it may come with numerous obligations. Existing contracts, pending lawsuits, unpaid taxes, judgments, liens, and other liabilities might be involved in the business purchase.
In such cases, the prospective buyer must conduct proper due diligence to identify all the pending obligations and potential liabilities involved in a Florida business purchase.
Discovering the Owner’s Motivation to Sell the Company
It is fundamental to discover the owner’s reasons to sell a company. No one decides to sell a company without a reason. Also, the reason behind the decision to sell may reveal some factors “hidden” in the negotiation.
For example, if the seller’s motivation to sell a company is moving to a different business segment or enjoying retirement, there are no apparent reasons to be concerned.
However, if the seller has no feasible reason to sell the company and avoids talking about the matter, it immediately raises red flags. A careful approach is urgently required if the company:
- Is not as profitable as it appears
- Has the potential to result in larger expenses in the future
- Has unusual hardship involved in the management and daily operations
- Has experienced a decreasing demand for its goods or services
- Has no sufficient structure to survive the competition
Working with an experienced business acquisition attorney can be a great way to identify whether the seller is actually disclosing all the due information.
Pre-Checking the Business Documentation
It is impossible to establish a Florida business legally without the required documentation. Depending on how the company is structured, it might require different forms of licensing and permits.
Once the negotiation advances to the next stage, it is fundamental to pre-check the business documentation, including the company’s
- General business license
- Fictitious name (DBA) registration
- Business structure registration (e.g., LLC, Corporation, etc.)
- Tax registration documents
- ID numbers
- Professional licenses
- Building and zoning licenses
- Any other applicable licenses and permits
It is a good idea to have a full checklist in hand to specify which licenses and permits the company needs to operate and how much it will cost to obtain or maintain.
How to Buy an Existing Business in Florida – Work with an Expert Business Attorney Today
A well-versed legal advisor in contract law and business acquisitions, Attorney Romy B. Jurado willingly wants to help you succeed. Waste no time – call us today at (305) 921-0976 or email [email protected] for an individual consultation.