Selling a Business
Selling a Business in New JerseyA business owner has often put his life’s work into making his business successful. It is often his most valuable asset. However, selling a business is far different from managing it. Negotiations are difficult, and New Jersey’s legal environment is complex. It is important to have experienced business attorneys representing you in this complicated transaction.
Our attorneys have decades of experience. We have represented owners in the sale and purchase of many different types businesses. We guide sellers through the entire process, from the letter of intent to closing and any follow-up issues.
Negotiating the Deal
The sale of a business is a complex transaction, and New Jersey is an especially complex environment to sell a business in. It is important to have skilled negotiators on your side. Our attorneys have represented business owners in many difficult negotiations. We understand that the goal for each seller is to maximize his return while limiting his liability in the process of selling the business.
We bring a unique skill set to each transaction. For instance, our tax attorneys, led by Frank Nardi who is a certified public accountant in New York and New Jersey and is also certified financial planner, bring a sophisticated background to the tax and financial aspects of the deal. Our business attorneys are experienced negotiators. Indeed, Maurice McLaughlin is a mediator appointed by the Superior Court of New Jersey to help negotiate settlements to business disputes.
The Contract for the Sale of the Business
The Contract is the most important document in the entire sale. Under the law in New Jersey, contracts govern the rights and duties of buyers and sellers. What a seller will receive – and what he must do to receive it – are all governed by what is in the contract for the sale of the business. Contracts deal with financing contingencies, environmental liabilities, restrictive covenants, assumption of liabilities, representations, warranties, franchise issues, due diligence, and many other issues.
It is important to have an experienced business attorney on your side before negotiating the Contract. Our lawyers have decades of experience negotiating and drafting commercial contracts.
Structuring The Deal
There are many different types of business sales. The differences between them and their effects are considerable. For instance, whether the approval of all or some of the owners is required, the seller’s liability and the tax consequences of the sale often depend on the structure of the deal, and what is contained in the agreement between the owners (such as a partnership agreement, a shareholders agreement in a corporation, or an operating agreement in a limited liability company, or “LLC”). When there is no agreement between the owners, New Jersey’s business laws will govern.
There are many different ways a transaction can be structured, such as a sale of some or all of the business’s assets, a stock sale, or a merger. Our attorneys are experienced at examining our clients’ needs and structuring the deal to maximize their return, while minimizing their liability and tax burden.
Purchasers often want extensive due diligence, while sellers often want to sell the property “as is, where is, with all faults.” Due diligence often includes financial, physical and environmental inspections and review. Our attorneys negotiate with purchasers to ensure that they get what they need to complete their purchase, while limiting their ability to back out of the deal or demand concessions.
The fact that the purchasers are buying the business means they believe that the seller has built a valuable enterprise. For this reason they may want the seller to remain with the business, at least for a limited time, to help with the transition. They may, in fact, want the seller to remain with the business for a longer period. Our attorneys negotiate and draft transition, consulting and employment agreements which protect our clients’ interests and ensure that they are adequately compensated.
Restrictive covenants are often demanded by buyers as part of the agreement to buy a business. There are many types of restrictive covenants. One of the most important to buyers is a non-compete or non-competition agreement. This is only logical – the purchasers are buying the business because the seller has made it successful. Buyers often don’t want the seller opening up the same type of business next door. Other examples are agreements which restrict the seller’s ability to do business with the business’s clients or employees. However, the seller can and often does want to continue working in the business she knows best, so we strive to ensures that any restrictive covenant our clients agree to ensure they have the ability to continue to make a good living doing what they know best.
Our lawyers’ business litigation experience is extremely helpful in this regard – having litigated many fights over alleged breaches of restrictive covenants, we can tailor them to meet our clients’ needs and avoid disputes in the future.
Closing the Deal
As important as all this negotiation and drafting is, our attorneys never take our eye off the ball. We understand that it is our clients’ desire to sell their businesses and make a profit. Our business attorneys are therefore committed to doing what it takes to close the deal while protecting our clients’ interest.
Call (973) 890-0004 or e-mail us to speak with one of our attorneys about the sale of your business.