One of the quickest ways to become a successful business owner is to buy an existing successful business. Some might look at it as cheating, but smart business owners look at it as a savvy investment. In this article we will take a look at the basic aspects of buying a business.
Purchasing an existing business can be a complicated process. Prudent investors will carefully review a business’s audited financial statements, tax returns, customer base, existing employees, ongoing contracts, policies, and practices for starters. From there, a buyer can begin negotiating to purchase the business in one of three types of transactions: asset purchase, stock purchase, or merger.
An asset purchase is the simplest method, and is accomplished when a buyer purchases a business’s assets without taking on any of its liabilities. In a stock purchase, the buyer takes control of a business, along with all of its accompanying assets and liabilities, in essence stepping into the previous owner’s shoes. A merger is where two previously separate businesses are merged into one.
In Pennsylvania, bulk sales laws require that every corporation, joint-stock association, limited partnership, or company that sells or transfers 51 percent or more of any category of its assets must do so in compliance with bulk sales laws. Thus, it is important to find out the implications of this restriction on your planned business purchase before signing any contract.
For more information about acquiring an existing business, or for help with other matters related to managing your business, the attorneys at the Scolieri Law Group, P.C. can help. Located in western Pennsylvania, our attorneys are experienced in Pennsylvania business law and can take care of the details for you every step of the way. Contact us today at (412) 765-0546 or via email at email@example.com.