Do You Need a Lawyer to Buy a Business?

2021 Midwest Road, Suite 200, Oak Brook, IL 60523

Do You Need a Lawyer to Buy a Business?

Do You Need a Lawyer to Buy a Business?

lawyer help buy businessNo, you don’t “need” a lawyer to buy a business — as in, there is no legal requirement to hire a lawyer to buy a business. You also don’t “need” a contractor to build a house. You don’t “need” a roofing company to change your roof. You don’t “need” an accountant to do your taxes. But we hire people because of their expertise. And quite frankly, DIY legal services are not the highest and best use of your time as a business owner. (The highest and best use is bringing in business and making sales).

How Does an Attorney Help You Buy a Business?

The attorney has two goals when helping a buyer buy a business. 1) The lawyer helps you make an informed decision when buying your business and 2) puts safeguards in place if things were to go wrong in the future.

In order to help you make an informed decision, the lawyer:

  1. Works with other business experts to determine the value and liabilities of the target business
  2. Ensures the target business does not owe any taxes
  3. Reviews the target’s business contracts so the buyer knows what other obligations the buyer has
  4. Determines if there are other liabilities the buyer should be concerned about (such as potential lawsuits)
  5. Makes sure all of the target business owners agree to the sale of their business
  6. Makes sure the target business is not violating any laws and is operating legally and ethically

The lawyer helps the buyer put safeguards by:

  1. Negotiating the letter of intent (LOI) properly and include a no-shop clause and other dealbreaker terms
  2. Using the information learned from the lawyer’s investigation (due diligence) to write protective terms in the purchase agreement
  3. Negotiating a holdback clause to protect the buyer from potential surprises that may happen after the business is closed
  4. Advising the buyer as to what other experts should be involved to help the buyer make the best decision

While you don’t “need” a lawyer to do all of the above, do you really want to risk trying it on your own when making a giant financial and personal decision that affects both your professional and personal life?

If you need help buying a business, call us at (630) 517-5529.