If you are planning to buy or sell a business in Texas, you want to make sure that the process goes as smoothly as possible. At Daic Law, we help clients on both sides of the table – buying or selling – and we know how important it is that all aspects of the purchase or sale are managed appropriately. In this two-part series, we will discuss some important things to remember when buying or selling a business in Texas.
Part One: Buying a Business in Texas
Many people choose to buy an existing business, rather than starting one from the
ground up. There are several benefits to buying an already established business, such as reputation, customer base, established inventory. There can also be complexities to buying an established business, especially if the business has fallen on hard times.
Here are some important things to remember as you contemplate buying a business and move into the purchase process:
- Why the business is for sale: The reason the current owner is selling is an important factor in your buying process. Is the owner retiring? Is the business underwater or facing bankruptcy? Find out before deciding to buy.
- Explore company history: Check public records or city and county offices for information about the business’s history, such as licenses, permits, previous owners, etc. This is important in making sure the business meets the legal requirements of the city, county, and state.
- Get financial records: Before buying a business, obtain financial records for at least the previous two years of operation. Make sure you obtain records for expenses, cash flow, assets, and liabilities or debts.
- Get an itemized list of sale contents: Before buying a business, get an itemized list of exactly what the sale includes. Take note of things like fixtures, inventory, the business name, trademarks, patents, or intellectual property.
- Price and financing: It is very important to make sure you and the seller have a set, agreed upon price for the business. You will need this bottom line when approaching investors or lenders if needed for financing.
- Smooth transfer: Many businesses find it helpful to work out a smooth transfer of ownership involving both the buyer and seller. This can help prevent a negative impact on the business, employees, or operations. Depending on the type of business, having the input of the previous owner can also help as you learn the ropes of your new venture.
Getting Help When Buying a Business
When buying a business, there is a lot of research, time, and paperwork involved. Get help with the buying process by contacting Daic Law today. We can help you get the information you need and manage the buying process so you can be certain your new business is ready to go. Call our office at (713) 808-5246, or email us at firstname.lastname@example.org.