Share This Info:  

Do I Need To Hire An Attorney When Buying A Business?

See All Discussions   •   See All Contributors   •   All New Discussions & Comments

Comments & Replies: 6     Views: 4569     Posted By: Peter Siegel MBA  Peter Siegel MBA: BizBen Founder, ProBuy/ProSell Program Director

Topics: Buying A Business, Legal Issues     Tags: buying a business, legal issues

In my opinion it is vital that an experienced business attorney be part of your professional team. They should review all legal documents. It is extremely important that you hire an attorney that is familiar not only with the business buying process but that also has the time available to all handle the paperwork that is involved with this process in a timely basis. You'll be happy to know that many business brokers have lists of attorneys who are familiar with the business buying process. An experienced attorney is vital in order to make sure that all of the details are handled properly.

However, you should keep in mind that many attorneys are not qualified to give actual business advice. Your attorney will be looking after your interests and thatís their main job; but you need to know that the sellerís interests also must be taken into consideration. If you end up in a situation where your attorney goes too far in trying to protect your interests as the buyer, it is possible that the sellerís attorney may instruct their client not to proceed with the transaction. The deal must be fair for all parties involved. Remember that the attorney works for you, and you must have a say in how everything is done.

Again, in my opinion it is absolutely vital that you have an experienced business attorney involved whenever there are contracts and complicated business transactions taking place. The purchase of a business is one of those situations. Do your due diligence and find the right business attorney with a good reputation and track record.

I do agree that it is wise to have an experienced attorney review the documents, especially complicated leases. However, I recently went through a nightmare with some sellers that hired their labor attorney, he didn't know anything about business transaction law and got the sellers hung up to the point they ruined their own deal. Ultimately, buyers and sellers should use the best resources available to them but not abandon common sense when making business decisions that will profoundly affect the success of the transaction.

No, you don't need to hire an attorney; but, you don't NEED to buy fire insurance either.

Approaching four decades as a licensed attorney (NJ), I can attest to how important it is for business buyers and business owners to have a competent, professional attorney who specializes in business transactions. That expertise and experience in business transactions is crucial. When I practiced law in New Jersey, that was my concentration; and, if someone came to me with a personal injury, or malpractice, or workers' comp case, I found them an expert attorney in those areas. Yes, attorney specialization matters a lot. The right attorney can help the buyer make the deal that's best for all concerned; the wrong attorney will break the deal - and charge a lot in the process.

So, shop around; ask the business broker, your banker, your insurance agent, for recommendations of lawyers with business transaction experience; interview a few different lawyers and have them tell you what types and sizes of deals they have handled. And, don't be impressed by the lawyer who has done the "big deal"; rather, find a lawyer who has handled a multitude of transactions that are most similar in size and scope to the one you are beginning.

Contributor: Business Broker: LA County Area

I would add, when selecting an attorney, the person's skills and legal background need to be weighed against one crucial factor -- how "business-friendly" is that lawyer. Many of us can point to horrible experiences where an attorney seems more interested in earning a fee, or keeping the transnational horse in the barn, rather than crossing the finish line to the benefit of all concerned. When making the attorney selection, pay tons of attention to his/her flexibility and willingness to get the deal done.

We've all heard the question: "Is this lawyer a 'deal-maker' or a 'deal-breaker'." In all the years I practiced law in New Jersey, specializing in business transactions, it was my assumption that the parties to a business deal wanted the deal to go through while eliminating or reasonably limiting the risks to both parties. In my experience, the truly effective attorney finds every way possible to accommodate the differences between the parties and makes the deal work, unless to do so would be unreasonably and disproportionately disadvantageous or dangerous to the client.

In short, it's easy to say: "It can't work." It's a lot harder to say: "Let's try another way to get the same result."

Find an attorney who is honest, smart, experienced ... and creative.

If a buyer asked me that question I'd say "you probably need to ask an attorney to answer that question for you!" just joking, but seriously, yes, I'd never dissuade anyone from seeking either legal advice or asking an accountant for advice, because if anything ever went to court I can imagine how bad it would look if I had told a client to not seek other qualified advice.

I've had lawyers become involved in transactions, and yes, sometimes they have been "deal killers" because they have sent back my California Association of Realtor forms (CAR) forms, such as purchase agreement, back to me, revised from their pen, which I won't allow. My CAR forms are drafted by attorneys from the state, and so they are valid contracts as they are written.

Unfortunately in selling a small business the documentation on the business is not 100% from the seller, and so if someone wanted to do, say a forensic audit of the business, it may be difficult because sometimes if not always there will be an element of cash involved in the sales, and so a buyer must do their due diligence, but also see in between the lines when making a thought out decision. Situations like these are when an attorney can tell a client not to do the deal, because their job is to eliminate risk from a situation, and when buying a business, there is always an element of risk involved.

  Helpful Resources To Assist In Selling And Buying California Businesses
Shalonda Chappel-Pilgram: Escrow & Bulk Sale Services - Southern California

Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.

Helen Yoo, New Century Escrow - Escrow Services In Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Janet Carrera: Escrow & Bulk Sale Service - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.

Brad Steinberg, Broker - Laundromat Specialists

PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.

Peter Siegel, MBA, BizBen Founder, Lead Facilitator - ProBuy, ProSell

Founder & President Of (since 1994) & I am the Lead Facilitator for the ProSell & ProBuy Programs on both platforms. I consult daily with business buyers, owner/sellers, and intermediaries daily about buying and selling businesses. Reach me direct at 925-785-3118.

Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Elizabeth McGovern: Escrow Services - San Francisco Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Valuing A Business - Do You Add The Inventory Amount To The Price Or Not?

A business buyer asks how to handle the inventory amount in the purchase price of a business. Do you add the inventory value to the business value? Peter Siegel, MBA (ProBuy & ProSell Program Advisor - Lead Facilitator ) answers this question with the BizBen Network of advisors and resources.

Absentee Run Businesses - A Myth Or Reality When Buying A Small CA Business?

Some buyers search for an absentee business to own, wanting to collect profits generated by a successful enterprise without having to stand at the sales counter or cash register, without having to cook, operate equipment or talk to customers. Here's some insight about finding such a business.

Tips When Using Escrow Bulk Sale Services When Buying Or Selling A Business

The final part of the business for sale transaction is the escrow and bulk sale process by Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy & ProSell Program Advisor) answers questions and describes the escrow and bulk sale process. Peter can be reached direct at 925-785-3118.

Selling My Small Business: What Items Should I Have Ready To Be Successful?

When selling a small to mid-sized business, owners should have their paperwork and financial information ready to go! They should also have a short business plan of past history, current operations, and potential for the future. In this BizBen Discussion several advisors and intermediaries weigh in.

Selling A Business Without Getting Sued: 5 Tips For Business Sellers/Brokers

How do I sell my business without getting sued, isn't a subject just for discussions with lawyers. A seller can take some precautions to reduce potential legal problems. Peter Siegel, MBA Founder Of BizBen and BizBen's ProSell Program discusses this topic for business owners/sellers and brokers.

Is There Such A Thing As Paying Too Little When Buying A Small Business?

We all understand the idea of paying too much for a small business. But is there such a thing as not paying enough? That seems like an odd notion, but I'm familiar with situations in which a buyer acquired a small business for a figure substantially under what probably was market value.

Why Deals Fall Out: Unrealistic High Asking Prices Are Usually The Reason

The unfortunate truth is that approximately 50% of all small business sales transactions fall out. While failed transactions can happen for a many reasons, Peter Siegel, MBA (BizBen Director & Business Purchase Financing Expert) discusses the main reason deals fall through; steep asking prices.

If You Plan To Offer Seller Financing: 3 Things Owner Sellers Need to Know

When selling your business, offering seller financing is a great way to help your business standout from others on the market and it is also a good strategy to consider that can help you close a sale. Peter Siegel, MBA (BizBen ProSel Program & Financing Expert) explains. Reach him at 925-785-3118.

See All News, Tips And Events

Joe Ranieri Orange County Business Broker
Chris Lazurik Business Broker
Tim Cunha Business Brokerage
Escrow Services Diane Boudreau-Tschetter
Google Plus You Tube
Vlogs and Podcasts

Auto Related
Business Services
Children Related
Communication Related
Computer, Internet Related
Construction Related
Entertainment Related
Financial Services
Health, Beauty Related
Home Improvement Related
Maintenance Related
Manufacturing Related
Media, Publishing Related
Pet Related
Photography/Video Related
Real Estate Services
Restaurant, Food Related
Retail Related
Service Related
Sports Related
Transportation Related
Travel Related
Wholesale Related

Auto Body Shops
Auto Repair Shops
Bars, Sports Bars
Cafe Restaurants
Car Washes
Cleaning Services
Clothing, Apparel Stores
Coffee Shops
Convenience Stores
Deli Restaurants
Discount, Dollar Stores
Dry Cleaners
eCommerce Websites
Fast Food Restaurants
Florists, Flower Shops
Full Service Restaurants
Gas Stations
Gift Shops
Gyms, Fitness Facilities
Home Health Agencies
Ice Cream Shops
Juice, Smoothie Shops
Liquor Stores
Markets, Marts
Pizza Restaurants
Postal, Shipping Stores
Preschools, Day Care
Print Shops
Salons, Beauty Shops
Sandwich Shops
Smog Test Only Shops
Smoke Shops
Spas, Med Spas
Sushi Restaurants
Tire Shops
Towing Services
Vending Routes
Wireless, Cellular Shops
Yogurt Shops

Contra Costa
Del Norte
El Dorado
Los Angeles
San Benito
San Bernardino
San Diego
San Francisco
San Joaquin
San Luis Obis
San Mateo
Santa Barbara
Santa Clara
Santa Cruz

0 to $99,999
$100,000 to $249,999
$250,000 to $499,999
$500,000 to $999,999
$1 million to $2 million
over $2 million

BizBen - Where California Deals Get Done! 925-785-3118
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2019, All Rights Reserved

               Vlogs and Podcasts  
Join Us On Social Media - Content Updated Daily
Sign Up Today - For Our FREE BizBen Weekly Email Newsletter
Includes The Best Info On Buying, Selling, Valuing, Financing California Businesses:
Articles, Blog Posts, Podcasts, Videos/Vlogs, Discussions, Q&A, Workshops, Webinars,
Resources. Watch For An Email Confirmation After Signing Up Above. Thank you.
Clost Login

Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.

First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*

You Are A:

Email Address:

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Buying A Cheap Small Business For Sale: How To Find? What To Watch Out F...
Read More News
How Do I Navigate Through The Negotiation Process When Buying A Business...
Read More News