Buying or selling a business in North Carolina raises many issues that entrepreneurs have to deal with. The process of transferring an ownership interest should include an examination of the factors that make the business unique. Someone selling a business may open themselves up to liability if contracts, employee issues, intellectual property, tax matters and financial statements are not in order and correctly addressed in the deal.
Typically, the document used to effect a transfer of ownership is called an asset purchase agreement. In some cases, it may be called a buy-sell agreement or something similar. Regardless of what the document is titled, it may be tailored to address the purposes and complexities of the deal, as well as the needs and goals of the parties involved. For example, an asset purchase agreement can include provisions that lay out what will happen when a shareholder or other owner of the business retires, dies or becomes disabled. In a family business, the agreement could include a clause that gives family members the first right of refusal if someone wants to sell an interest in the business.
Business owners should make sure that their estate plans and asset purchase agreements do not have conflicting provisions. The death of a shareholder is a trigger for the operation of the asset purchase agreement in some cases, and problems can arise if the person’s estate plan does not properly address the business interest.
Before buying or selling a business, it may be wise to obtain legal representation. A lawyer with experience in business law might examine the facts of the case and draft an asset purchase agreement that meets the client’s goals. Buying and selling businesses can be complicated, but the assistance of a professional may quicken the process and give the client peace of mind.