Buying & Selling a Business

Representing Buyers

Buying a business involves far more than agreeing on a price. The way a deal is structured determines your tax exposure, the liabilities you assume, and your legal protections if problems emerge after closing. Our services for business buyers include:

• Deal Structure Analysis — We help you evaluate whether an asset purchase or stock/membership interest purchase is more advantageous. In an asset purchase, you acquire specific assets and typically avoid inheriting the seller's unknown liabilities. In a stock or interest purchase, you acquire the entity itself, including all of its obligations. Each structure has different tax consequences, and the right choice depends on the specific business and your goals.
• Due Diligence — We conduct a thorough legal review of the target business, examining contracts, leases, employee agreements, intellectual property, litigation history, regulatory compliance, insurance coverage, environmental issues, and corporate records. Due diligence uncovers risks that affect the purchase price, deal terms, or your willingness to proceed at all.
• Purchase Agreement Negotiation — The purchase agreement is the controlling document in the transaction. We negotiate and draft provisions covering representations and warranties, indemnification, escrow holdbacks, non-compete and non-solicitation covenants, transition services, and closing conditions.
• Financing Coordination — If the acquisition involves bank financing or seller financing, we review loan documents, coordinate with lenders, and ensure that financing terms are consistent with the purchase agreement.
• Closing and Post-Closing — We manage the closing process, including title transfers, assignment of contracts and leases, regulatory filings, and post-closing adjustments.

Representing Sellers

Selling a business you have built is a significant decision that affects your financial future, your employees, and your legacy. Our services for sellers include:

• Pre-Sale Preparation — The best time to prepare for a sale is well before you list the business. We help you clean up corporate records, resolve outstanding legal issues, and structure the business to maximize its value to potential buyers.
• Deal Negotiation — We negotiate the terms of the sale to protect your interests, including the purchase price allocation (which has significant tax implications), the scope of your representations and warranties, limits on your indemnification exposure, and any post-closing obligations such as consulting or transition services.
• Tax Planning — The tax treatment of a business sale varies dramatically depending on deal structure, entity type, and how the purchase price is allocated among assets. We coordinate with your accountant to minimize your tax liability while complying with federal and Pennsylvania tax law.
• Non-Compete Agreements — Most business sales include a non-compete covenant restricting the seller from competing in the same market for a defined period. We negotiate the scope, duration, and geographic limits of these restrictions to protect both parties' legitimate interests while ensuring enforceability under Pennsylvania law.

Asset Purchase vs. Stock Purchase

The most fundamental structural decision in any business acquisition is whether to structure the deal as an asset purchase or a stock (or membership interest) purchase. Buyers generally prefer asset purchases because they can select which assets and liabilities to acquire, obtain a stepped-up tax basis in the acquired assets, and avoid inheriting unknown liabilities. Sellers often prefer stock sales because the entire gain may be taxed at capital gains rates rather than as ordinary income on certain asset categories. The optimal structure depends on the specific facts of each transaction, and the negotiation between buyer and seller on this point often shapes the entire deal.

Coordinating the Sale with Your Estate Plan

If you are selling a business, the proceeds from the sale will significantly change your estate planning picture. A business owner whose primary asset is the business itself has different estate planning needs than someone who has converted that business into liquid assets. We help clients update their estate plans to account for the proceeds of a sale, including trust planning, gifting strategies, and beneficiary designation updates.

The Transaction Process

Frequently Asked Questions