Purchasing or selling a business can lead to various disputes at times, which, however, can be resolved with the help of an experienced and reputed attorney. Disputes are not uncommon, but handling them through the guidance of a smart and reliable legal counsel is advisable. Avoiding disputes before they actually happen would be ideal.
If a disagreement happens while selling or buying a business, the best possible option is settling it amicably or directly without involving a third party. However, if you have certain interests that have to be protected, getting a lawyer to assist you would be better.
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Getting Prepared for Buying a Business
Being a little judicious and transparent during the entire process of buying would save you from a lot of hassles and unnecessary rows. As a buyer, you need to be fully aware and careful about the information shared by the seller including the current state of the business, number of employees, clashes if any, and legal claims or lawsuits filed by the working staff, vendors, or competitors. Make sure you have a thorough look at the existing lease and the condition of the site or the building where from the business is operated.
Being new to the industry can be a little tiring and confusing. You can think about hiring the previous owner or a consultant until you feel confident about handling the business alone. Don’t forget to take the help of a transactional lawyer to get a purchase contract prepared in the right manner with precise details of the proposed deal.
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Getting Prepared for Selling a Business
If you are selling a business, you should ensure that the information you are sharing as a part of the deal is accurate and backed up by sufficient written records. Being a seller, you should be fully mindful of the buyer’s financial capabilities, especially if the purchaser is taking a loan or if financial approval is required for the transaction.
Let your financial adviser document your company’s condition before you share it with a prospective buyer. The information shared in the documentation should be consistent and accurate. The purchase agreement should have the terms and conditions mentioned clearly. Don’t hide anything that may mislead the buyer and affect the business in the long run. A competent lawyer will help you protect yourself even after the deal is finalized.
Common Causes for Disputes
There can be various disputes during or after a business sale. Some of the common reasons for the same are given below:
- Misrepresentation or wrongful claims regarding the financial status of a business.
- Fraud allegations related to the factual information provided by the seller during the deal.
- Unreasonable and unfair practices.
- Violation of the purchase contract.
- Non-payment of any sum mandated under the transaction agreement.
- Fraudulent trade secret
Disputes arising before and after a business purchase or sale can give you a lot of headaches. If you face an issue during a deal, you should consult a business litigator immediately. However, beware a lawyer who makes lofty promises including quick results. During a difference of opinion, you will certainly need the help of a strategic and competent attorney who is experienced in mediating and fighting cases in a court of law.