The same careful consideration people generally take when purchasing residential homes should also be applied when they are in the market to buy businesses. Prospective entrepreneurs in North Carolina who are interested in acquiring a company should be aware of certain pitfalls that often arise during the process.
Every purchase agreement should include a non-compete provision that forbids the seller from taking part in a competing business. It should include a precise definition of the similar kinds of businesses the seller would not be able to be employed at or own as well as a set amount of time for the restriction.
Purchasers should also be sure that there are no liens attached to the companies they want to purchase, which would mean that there are third-party claims to the assets. Those who are in the market to buy businesses should hire escrow agents or filing companies to execute lien searches in order to ensure they don’t end up getting saddled with the sellers’ credit issues.
Before agreeing to purchase an enterprise, a person should closely evaluate its financial history. Prospective purchasers should verify that the company’s revenues and expenses justify the selling price.
Commercial leases can be one of a business’s most significant assets as well as a way to tack on additional expenses. An attorney that routinely handles commercial leases may be able to provide someone with valuable input on whether he or she should purchase a particular enterprise.
Purchasers should also make sure that sellers sign the purchase agreements on behalf of their companies and as individuals. Doing so enables buyers to hold the sellers liable for the terms of the agreements should their businesses dissolve.
An attorney that specializes in business and commercial law may provide valuable services to those who are interested in buying and selling businesses. A lawyer could assist potential business buyers and sellers in a number of ways, including overseeing business transactions, drafting purchase and lease agreements, evaluating companies’ financial competencies and litigating to resolve zoning disputes.