When it comes to buying or selling a business, the seller and the buyer are both subject to a potentially complicated experience if the right method is not selected. To ensure minimal complications and less of a hassle for all parties involved, the buyer and seller must be aware of the different methods that can be used to buy or sell a business and select the method that best works for the situation at hand. In this instance, there are three different options to consider, an Asset Purchase, a Stock Purchase, and a Merger. Each has its advantages and disadvantages that may help make or break a deal. At Gateville Law Firm, we are Joliet Purchase and Franchise Business Attorneys serving Plainfield, Shorewood, Joliet, Crest Hill, and surrounding areas.

Asset Purchase Agreement in Joliet, Illinois

The first method to consider is an Asset Purchase Agreement. This type of agreement allows more freedom for the buyer side. This is because the Buyer can choose which assets, they want to buy out of the selling business, whether it be a few or the entire business. However, the Buyer must keep in mind that, whatever assets are being purchased out of the selling business will be accompanied by all liabilities associated with that particular asset. If the buyer does not purchase the entirety of the business, then any unsold assets and liabilities must be taken into consideration when the business is in the winding down phase of dissolution.

While the Buyer has the advantage of selecting which assets to purchase, there is a disadvantage in that the purchasing phase will be longer than in other types of business sales because all the assets and liabilities to be purchased must be considered and fully distributed before the sale goes through. Additionally, if the seller is looking to sell the entire business, an Asset Purchase Agreement may not be the best method of sale, since the Buyer is given the option to select which assets they want to purchase and are not required to buy the entire business. Without the entire business being sold, it will not automatically dissolve, and the seller must then wind down and dissolve the company after accounting for the assets and liabilities that are left.

Creating a new business start-up is an exciting opportunity and an opportunity filled with significant legal and business risks. Attorney Sean Robertson is a serial entrepreneur, business attorney, and tax-planning attorney that is enthusiastic about helping new businesses succeed and avoids unnecessary mistakes. Building a successful business often requires trial and error. Trial and error can be minimized by surrounding oneself with experienced business advisors and tax professionals. 

Yorkville Start-Up Business Lawyer to Assist New Entrepreneurs and Business Owners

Business and start-up attorneys are important advisors for an entrepreneur and new business owners. Entrepreneurial clients are wise in surrounding themselves with well-qualified and experienced business advisors that can give them wise advice. Wisdom often comes from trial and error. A successful business attorney and client relationship will guide you and your business pioneer a path unchartered. Recessions and tough times are filled with opportunities and new beginnings.

Kendall County Letter of Intent Attorney

The first step in the purchase and sale of a franchise is the letter of intent. The letter of intent is a letter that outlines the details involved in a potential sale. Second, the letter of intent is a formal declaration of a buyer's seriousness in purchasing a seller's franchise. The letter of intent describes the details of the proposed franchise purchase agreement such as the following:

• The earnest money tendered by the buyer

• The financing terms of the deal (cash or a loan)

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Oswego and Kendall County Franchise Business Attorneys

The purchase or sale of a franchise is a major investment transaction. The process is complex and requires varying different legal documents, which require precision and understanding. The first step in the sale and purchase of a franchise is the letter of intent. 

Letter of Intent Attorney in Kendall County and Nearby Areas

The Letter of intent or “LOI” is necessary for several reasons:

• The Letter of Intent guarantees the franchise will be sold to the agreed buyer even if other potential buyers appear in the future. Thus, the LOI restricts the business deal between the buyer and seller.

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Purchasing or selling a business can be a complex and often overwhelming experience, both for the buyer and seller. There are various aspects that need to be considered, as well as careful consideration and disclosure of all potential liabilities that may surface. When buying or selling a business, there are different ways to go about the sale, but the three most common ways of acquiring a business are through either a stock purchase, an asset purchase, or a merger. It is important to know what each option entails to ensure the correct procedure is chosen to benefit both the buyer and seller in the sale of a business.