An entrepreneur in North Carolina who sells their business can increase the amount of their net worth. However, they have to do it correctly and avoid the common mistakes that can result in selling the business for less than it’s worth.
For starters, a non-compete provision should be included in the sale agreement to protect any business ideas that an entrepreneur may want to pursue after the business has been sold. The clause should provide a specific length of time and geographical area in which the seller is forbidden from operating a similar business.
In order to ensure that they are paid the amount that was agreed upon, sellers should obtain as much of the purchase amount they can at the closing of the sale. This is in case the buyer fails to operate the business properly and is unable to make the installment payments over time. This also allows the seller the chance to make investments with capital they receive at closing. For payments that are to be paid over time, the seller should ensure that they are secured by the property that is being sold and any other assets that can help them receive the full sale price.
The seller should insist that the buyer endorses the purchase agreement on behalf of their business as well as personally to ensure that the agreement can be honored independently of the condition of the buyer’s company. If the buyer’s company happens to dissolve, the seller would be able to hold them personally liable for the agreement.
An attorney who practices business law may assist clients by protecting their rights during a business sale. The lawyer may negotiate contract terms on behalf of a client, draft a purchase agreement and oversee other types of business transactions.