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What You Need to Know When Buying a Business

Posted on in Buying or Selling a Business

IL business lawyerWhile many entrepreneurs are able to succeed by developing an idea for a business and taking steps to start a new company, there are multiple other options available. For some people, buying an existing business can provide a number of benefits, such as avoiding the costs and complications of the business formation process and being able to take advantage of a company’s existing procedures, personnel, and customer base. If you are considering the purchase of a business, either as a new business venture or as an acquisition that will provide additional value to an existing company, it is important to understand the steps you can take to protect your financial interests and ensure that you will be able to achieve your goals.

Issues to Consider When Acquiring a Business

As a prospective business owner, you will want to be sure to understand your goals as you begin the process of identifying a business to purchase. In addition to considering the financial benefits, including the expected return on investment, you will want to make sure a business aligns with your values, your familiarity with a particular industry, and your knowledge of business practices. This will help you identify the right business that will allow you to succeed in the years to come.

After identifying a business that may be purchased, it is important to gain a full understanding of why it is being sold. If the current owner is selling their business because they wish to retire or are looking to pursue other business opportunities, this may allow you to step in and assume control of a successful company. However, if an owner is selling their business because of debts, legal issues, or an inability to effectively compete in the marketplace, you will need to determine how these issues may affect you and whether you will be able to make changes that will ensure that the business can be successful. Gaining a full understanding of a business’s operations, market share, and strategies can help you ensure that buying the business will be a good investment.

Once you have selected the right business to buy, you will need to perform due diligence to ensure that you have complete knowledge of the legal and financial details that will affect you as the company’s owner. In addition to reviewing the business’s finances, it is important to look at issues such as required licensing, local or state permits, zoning laws, environmental regulations, taxes, and existing contracts and leases. You will also want to review the assets owned by a business, including equipment, inventory, and intellectual property to determine whether new purchases or updates will need to be made. You should also gain an understanding of the current employees and management to determine whether any changes may need to be made to the company’s organizational structure.

Contact Our DuPage County Business Acquisition Lawyers

If you are interested in buying a business, the lawyers of Stock, Carlson & Asso. LLC can advise you on the legal issues that you will need to address and the ways you can protect yourself during a transaction. We will help you complete due diligence, work with you to review and renegotiate contracts, and ensure that you take the correct steps when transferring ownership of a company. To get legal help with business acquisitions and related issues, contact our Wheaton business transaction attorneys at 630-665-2500.

Sources:

https://www.nerdwallet.com/article/small-business/buying-an-existing-business

https://www.entrepreneur.com/article/81176

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