There is a wide array of legal issues involved in the process of selling a business. Many business owners overlook the importance of focusing on the legal matters associated with the sale. In this article we will discuss three significant legal mistakes sellers make when selling their business.
#1 Legal Mistakes Sellers Make – Don’t Use A NDA
The first legal mistake business owners make is skipping the use of a non-disclosure agreement. A non-disclosure agreement should be in place before disclosing to any buyers that a business is on the market. NDA’s are an invaluable way to restrict who does and does not know your business is for sale. The last thing a business owner wants is for competitors or employees to learn confidential information.
#2 Legal Mistakes Sellers Make – Don’t Hire An Attorney
Another mistake business owners make is they don’t work with an attorney. You need to work with a lawyer experienced in the area of sales if you are selling a business. This is one of the best ways that you can protect your future. An experienced business broker can help you find a lawyer with a background in the buying and selling of businesses.
#3 Legal Mistakes Sellers Make – Don’t Get A Letter Of Intent
The third legal mistake that business owners make when selling their business is that they do not get a letter of intent. A letter of intent is a key legal document in the process of selling a business. The letter of intent is designed to clearly spell out expectations. It also protects your interests as a business owner. When a buyer signs a letter of intent, it indicates that they are taking the process seriously. This will protect you from wasting your time.
The process of buying or selling a business is complex in many different ways. EBIT Associates can help you increase your chances of a successful sale.