Buying a business in New York City is a big decision. The purchase of an existing business can have many advantages to starting a business from the ground up. However, several issues must be considered and addressed before you officially buy an existing business.
An attorney can help you better understand the specific steps to take when purchasing a business. In general, here are some issues to consider before buying a business to protect yourself and your future business:
- The business valuation: What is the value of the business? The business valuation will determine what the business is worth and help you negotiate a fair price. Business valuations may consider the cash flow of the business and the value of each business asset.
- The tax implications: You should consider the taxable profits and losses of the business. You can request the seller to show you tax returns and financial statements from the past few years so you can review with your accountant and attorney.
- The sale of other businesses: It is important to review recently sold comparable businesses. This will help you see what other businesses are selling for and may help you during negotiations.
How a business law attorney can help
You will want to work closely with your lawyer once you determine you want to purchase the business. An attorney can help you develop a strategy to guide you through negotiations as well as assist with any potential issues that may arise during this process.
Once a deal is reached, you will need to have a purchase agreement to outline the terms and conditions of buying the business. This is a binding contract and should be carefully reviewed by your lawyer before you sign. The final step is the closing, which will likely include many parties involved in the transaction.
At Rich Michaelson Magaliff, LLP, our attorneys help individuals purchase businesses in New York City and the surrounding areas. We have decades of experience to guide you through this process so you can create the best path for success for your new business.