Martin A. Mansfield Jr. - The Entrepreneur's Lawyer

The 3 Most-Used Alternatives for Business Purchases and Sales:

Purchase and Sale of Business Assets or Stock:

Most purchase and sale agreements for business are known as Asset Purchase agreements.  These allow for fine-tuned control of precisely what aspects of the business are transferred.  The assets identified in the agreement are those sold; everything else is retained by the prior owner.  This type of agreement can be used regardless of the business format of either the Seller or Purchaser.  The Seller's debts, stock equity if applicable, other contractual agreements, and even ability to continue as a non-competing business, are unaffected and not generally transferred to the Purchaser.  This form of agreement makes a potentially highly complicated transaction relatively straightforward.  Using this form is also likely to save on attorney fees, because the contract can protect the parties from a more limited number of risks than those in other transaction forms.

Purchase and Sale of Stock (Corporate Transactions):

Sometimes, the Seller and Purchaser wish the entire corporate business to be transferred as a going business and use the Stock Purchase agreement to accomplish this.  On its face, the sale of the stock seems to be a simple solution, but because all the debts, liabilities, contractual and employment obligations, etc. of the business are transferred right along with it, the Purchaser needs many risk protections built into the agreement, and Purchaser's attorney must do considerable due diligence to be reasonably sure that unwanted problems that could become the Purchaser's responsibility are either not transferred or are indemnified against by the Seller.

Mergers (Corporate Transactions):

Two are more corporations can combine in several different ways, emerging as a single entity, if desired.  The complexity and expense of mergers makes them generally avoided in small business transactions.  But there are situations that make mergers a good choice.  The other side of the merger coin are various forms of divestiture, such as spin-offs of part of the business into a separate corporation.



Fees For These Matters:


My experience in these 3 forms of business sale transactions means I am generally able to efficiently and thus economically represent clients in them.  I base my services on my hourly rate and can generally give close estimates of the time to be involved once I become familiar with the transaction's details.  As a rule, my fee for asset purchase and sales agreements are $2400. I don't charge you fees until we are ready to go, so you can call me at 303-740-2231 and go over the basics with me without concern over incurring a fee.  Also, if you want, you can Contact Me by email from this Web site.