Barbara Taylor and her husband Chris are the founders of Synergy Business Services, a business brokerage company. She’s a regular blogger on “You’re the Boss,” a feature of the New York Times’s Small Business section, which is where I discovered her. Then I learned that she lives and works in Northwest Arkansas.
I posed several questions to her:
1. At what stage-if at all–should you ask for a lawyer’s assistance in purchasing a business?
I see some clients – most of whom are sellers – get an attorney involved as soon as an offer to purchase is presented by a buyer, which is typically done in the form of a non-binding Letter of Intent or Term Sheet. However, I’d say it becomes mandatory to get attorneys involved as soon the LOI has been signed and both parties have moved into the Due Diligence phase of a deal.
More often than not it’s the buyer’s attorney who will be drafting the Definitive Agreement (either an Asset or Stock Purchase Agreement, depending on the situation). As a buyer, you will more than likely want your attorney to help you draft an LOI to present to the seller. Once an offer is accepted, ask your attorney to start drafting the Definitive Agreement right away.
If you’re a a seller, I recommend that you send the first draft of the Definitive Agreement to your attorney immediately, and keep him or her involved throughout the remainder of the ownership transfer process (from Due Diligence through Closing). In my opinion, no one should buy or sell a business without counsel from a qualified attorney and a CPA.
2. How can you tell if a lawyer has the right temperament and skills to be helpful in a business transaction? Read the rest of this entry