Lay It All On The Table When Selling A Business
On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Sales & Dissolutions on Monday, March 21, 2016.
Businesses change hands all the time in California and throughout the nation. Typically, every company owner's reasons for selling a business are unique to an individual situation. Various legal challenges may arise in the course of such transactions that are best dealt with alongside experienced guidance.
Business owners are advised to "lay it all on the table" when discussing deals with potential buyers. Otherwise known as "full disclosure," it is often best to be upfront in terms of any troubling issues that may affect a prospective buyer's decision. Being honest regarding any flaws that exist within a business provides the clarity a potential new owner needs to make informed choices.
Some experts say that being transparent and sharing the bad along with the good helps build trust and credibility that can boost negotiations. Consequently, trying to conceal negative business details may actually backfire and prevent a deal from taking place at all should a buyer learn that a current owner was less than forthright when providing information. Details about inventory backlog, financial crises or any number of other important issues may impact a potential buyer's decision.
Depending on the size of a California company and various other issues involved in selling a business, an owner or potential buyer may find it helpful to seek assistance from a business and commercial law attorney before negotiating a deal. An experienced lawyer can help make certain that the client clearly understand the legal terms and obligations included in a business sale contract. Allowing an attorney to act on one's behalf often ensures that one's business interests are protected and all available options are explored to accomplish immediate and long-term business goals.
Source: postcrescent.com, "Go ugly early when selling a business", Scott Bushkie, March 12, 2016