Negotiating the terms of a business purchase and sale agreement is a critical step when buying or selling a business. This agreement outlines the rights and obligations of both parties and sets the framework for the transaction.
Whether you’re a buyer or a seller, understanding and successfully negotiating these terms is essential for protecting your interests and ensuring a successful deal. Here are some considerations to keep in mind.
Make Time for Due Diligence
Before entering into a business purchase and sale agreement, you must have a clear understanding of the value and risks associated with the business. To that end, it’s imperative to undergo thorough due diligence.
The goal of due diligence is to identify any potential risks or liabilities associated with the business as well as evaluate the business’s financial performance, operations, legal compliance and other key factors that could impact the transaction. Armed with this information, you will be in the best position to strategically negotiate the terms of the agreement.
Understand Your Priorities
Concurrent to the due diligence process, you should also be defining your priorities and goals for the transaction. Consider factors such as price, payment terms, liabilities and contingencies. Then, assess where you are – and are not – willing to bend during negotiations. Spelling out your priorities will help you and your attorney focus on what is most important during negotiations while also identifying where you may be willing to compromise in order to reach an agreement.
Be Patient
Negotiating the terms of a business purchase and sale agreement can be a complex and time-consuming process. It is important to be patient and not rush the negotiations. Taking the time to carefully consider each term of the agreement and undergo thorough due diligence can help ensure that both parties are satisfied with the result.
Seek Legal Counsel
There’s a lot at stake during a business purchase and sale transaction. Having a lawyer in your corner can help you negotiate from a position of strength and ensure that your interests are protected. Our team is here to help. We represent our clients in their acquisition and disposition of business assets, corporate stock and membership, partnership interests and more. To learn more about how we can help you with your business and real estate law needs, contact our team at the Law Offices of Alex D. Sirulnik, P.A.
