5 Reasons You Need a Transaction Attorney When Buying or Selling a Business
Transferring ownership of a business is a significant undertaking, both for the buyer and the seller. Whether it’s your first business sale, or you’re a seasoned pro at buying companies, there’s always something “different” that comes to light during the transaction, especially when it comes to the legal ramifications.
Whether buying a Chicago business is your end-goal, or you have a Chicago business for sale, working with an experienced transaction attorney is a necessity for protecting your interests in many ways, especially these five:
- Guaranteeing Legality
While it’s optimistic to assume that everything in a business sale or purchase transaction is handled properly, only a lawyer can make sure a transaction is legal and all considerations are incorporated.
For buyers, a lawyer can make sure all business assets and intellectual property are included in the transfer of ownership, ensuring that a sale is handled completely. For sellers, a business lawyer can ensure ownership transfers fully without any strings or contingencies, providing advice for your legal and financial protection throughout the process.
- Assisting in Due Diligence
Due diligence is an important factor for everyone involved in a successful merger or acquisition. A lawyer with mergers and acquisitions (M&A) experience can help interpret financial data and provide guidance in the research and evaluation process.
Buyers can benefit immensely from a lawyer’s resources, creating a more reliable frame of reference and assurance that a transaction is legitimate. Sellers aren’t free from due diligence; with the help of a lawyer, they can research the history and integrity of the buyer in a transaction and minimize post-closing risks.
- Helping with Negotiations
It’s not uncommon for a buyer and a seller to have different ideas of what is appropriate in a business transaction. In many cases, there are terms beyond the purchase price components that require creative thinking to bridge gaps between buyer and seller expectations.
A transaction lawyer should be part of the M&A team, using expertise and experience so that all parties reach a mutually satisfactory outcome. The lawyer is an integral part of the team and his or her knowledge from previous transactions can make the difference in a deal being terminated or consummated. Plus, no one likes to pay fees when a deal ends in a termination.
- Managing Conflict Resolution
A smooth, easy transaction would of course be the best scenario for both parties involved, but rarely are mergers and acquisitions so simple. Transaction attorneys, working in concert with the M&A advisors, are trained in conflict resolution and propose logical, legal solutions that may otherwise be overlooked.
Both buyers and sellers can benefit from assistance with conflict resolution, especially when these issues impact the legality or potential benefits of a sale. When conflicts arise between a buyer and a seller, an experienced transaction lawyer can mitigate potential damage on his or her client’s behalf.
- Drafting Contracts
In order to complete a merger or acquisition, the proper paperwork must be drafted, signed and filed. In most case, this process requires an experienced transaction attorney in order to guarantee the transaction is handled according to state laws and requirements.
A lawyer experienced in overseeing M&A transactions can make sure the contracts safeguard his or her client and guarantees that all terms that have been agreed upon are carried out appropriately.
Having a skilled business attorney on your side can mean the difference between protecting your interests and leaving yourself vulnerable to the wants and needs of another party. With experience in valuable areas of expertise like conflict resolution, contract creation, and negotiations, the right lawyer is the key to a successful transaction, whether you’re buying or selling a business.