Purchasing a Business is a Major Lifetime Investment. Learn How to Avoid Costly and Unnecessary Mistakes Here.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County New Jersey Buying a Business Attorney
THE PURCHASE OF A NEW JERSEY CORPORATION, FRANCHISE OR UNINCORPORATED BUSINESS
Because buying a business in NJ can be complicated, Hanlon Niemann & Wright will lead you through the entire process. We are here to protect your interests and to make your purchase a reality.
We not only know the laws directed to buying a business in NJ, we are practical and proactive, providing you with advice, solutions and recommendations to make your business purchase as seamless and efficient as possible. Our goal is to bring about a successful result, which means a “successful profitable closing”.
For more than 30 years, we have helped individuals, small and medium sized businesses, corporations, partnerships and LLC’s with their legal matters in New Jersey.
Hanlon Niemann & Wright is a business focused law firm that works with business men & women throughout the State of New Jersey.
The Legal Services We Can Offer You When You’re About to Buy a Business in New Jersey
Once you have found a business to purchase, our lawyers can help negotiate the legal terms of the purchase contract. We will draft a Letter of Intent, and then your Stock or Asset Purchase Agreement. We can also draft such documents as:
- Exhibits to the purchase agreement to be incorporated into the contract
- Opinion of counsel
- Promissory note
- Real estate lease and assignments
- Appropriate representations and warranties relating to the
- essential terms of the purchase
- Escrow and pledge agreement(s)
- Post closing agreements
- Non-disclosure and covenant not to compete agreement(s)
- Real estate purchase agreement(s)
- Corporate resolutions
- Operating Agreements among the members of the company
- Shareholder Agreements among the owners of the corporation
- Amended corporate bylaws
- Security agreement(s) and UCC financing statements
When representing a purchaser, due diligence must be exercised prior to the closing. In order to capably represent our clients, we negotiate when possible detailed representations and warranties from the seller. In addition, it is important to have a thorough review of all of the sellers contracts and leases, employee records and benefits, customer information, supplier agreements, other material and relevant documents, including lien searches on the acquired assets,. We will assist with the assignment of the lease for the existing and/or proposed business location(s), obtain the consent of the landlord, and review, revise and negotiate a new lease if necessary.
We can help you identify and thereby minimize costly mistakes of buying a sellers liabilities and assuming risks you did not bargain for.
Are You Looking for an Experienced and Knowledgeable New Jersey Business Attorney Who Understands the “Ins” and “Outs” of Buying a Business in an Efficient and Cost Effective Manner?
If so, then contact Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright today toll-free at (855) 376-5291 or email him at email@example.com. He welcomes the opportunity to assist you in your NJ business purchase.
Buying the Right Business for You Will Take Time – Just Don’t Take Forever to Make it a Go or No Go!
You can easily turn the buying process into an endless search. Buying a business consists of a series of actions and decisions. There are a substantial number of steps involved and a lot for you to consider before you sign a purchase agreement, especially if you’re someone who has never bought a business before. Changes in technology, marketing and competitive pressure can make current business practices obsolete. Even seasoned business owners must continuously refresh their thought process, particularly when considering the purchase of a business outside of their core area of experience and/or expertise.
Starting Off Right
When buying a business, you must first identify what type of business is right for you and then focus your search accordingly.
Take a good look at yourself. What are your strengths, weaknesses, likes and dislikes? Do not try to be something you are not. Sometimes it is best to start by ruling out all of the businesses you do not want to be involved in.
Next, consider your finances. With greater risk comes greater reward. There is smart risk and dumb risk. What type of risk taker are you? You must know the answer to be able to sleep at night. Still not sure? Then speak with Fredrick P. Niemann who will help you through the process of evaluating whether a business is or is not right for you. Mr. Niemann is not only a NJ business lawyer, he is a business owner and has been one for over 40 years, going all the way back to when he started a successful house painting company in Monmouth County, NJ to put himself through college and then law school.
The Legal Services We Can Offer You After You Have Purchased Your NJ Business
You may want to establish a meaningful relationship with us after your successful closing. That will be terrific. We can assist you with the following services.
Corporation formation and business planning: Our service will continue long after the articles of incorporation are first written. Businesses must plan for profitability, tax consequences, employment issues, and other concerns. Business can change with commercial needs and realities, and savvy business people will keep an open eye for changing risks and opportunities. We will help you launch your new corporation to minimize risk and legal liability and to promote your success.
NJ Contracts: Whether it is a goods or services contract, employment agreement, licensing and/or distribution agreement (or any other type of agreement), a contract defines and controls the business relationship. Let us be a clear voice for you by writing, reviewing, and negotiating your business contracts.
NJ Non-Compete Agreements: Are you concerned about protecting your valuable proprietary information against the possibility that your key employees might compete directly against you? If so, let our experienced corporation attorneys draft a non-compete agreement that will protect your valuable proprietary and confidential business information.
We can also prepare a non-competition agreement for your employees that can further protect your interests. We can counsel you on the best methods of implementing a non-compete agreement with existing and new employees.
NJ Business succession plans and agreements take place upon the death, disability, retirement or withdrawal of a business owner, key employee or partner. Depending on the type of business, transfers of ownership interests may not achieve a complete change of control. Careful estate and corporate business planning can minimize problems and facilitate business owners’ goals.
NJ Franchisee Law Representation: We will review your franchise document(s), explain your obligations, and advise you throughout the process of purchasing or selling a franchise. We want to be there to guide and protect you through your complicated, yet rewarding, investment decision.
Review of Your NJ Retail, Office or Industrial Lease
Acquiring a physical location for your enterprise is strategically one of the most important steps in establishing a new company; it brings your business plan one step closer to profitability. Commercial leases are generally highly negotiable, from the terms and conditions to the financial payments and methods of payment. You should not sign a lease agreement before having an experienced NJ commercial leasing attorney review the lease and negotiate its legal terms to protect your interests and save you money today and for years to come. A small mistake or oversight will cost you substantial money.
I consulted with Mr. Niemann following a recommendation from an associate in Brick, New Jersey. I was told that Mr. Niemann would be an excellent person to discuss an investment opportunity which was represented to me as very profitable. Mr. Niemann met with me promptly and reviewed the information which was given by the promoter. After having considered the promotional information, Mr. Niemann cautioned me against the investment. He requested a four-way conference be set up so that he could meet face to face, eye to eye with the promoter of this opportunity. After several hours of intense questioning and discussion, Mr. Niemann courteously and professionally concluded the meeting, whereupon he immediately told me not to invest a single penny into this scam as I would lose my investment. At the time, I was looking to invest several hundred thousand dollars. Thank God I listened to Mr. Niemann.
Since our meeting, I have learned that the deal was, in fact, a scam and that I would have lost my entire investment. The straight talking highly investigative nature of Mr. Niemann’s questioning and insight coupled with his significant past business experience was of invaluable help to me.
Scott Buongiovanni Freehold, New Jersey
Four Questions Business Buyers Should Ask, but Usually Don’t
The questions buyers of a prospective business really need answered are the questions they usually don’t think to ask.
Question #1: “When Did the Owner Decide and Why Did the Owner Decide to Sell His or Her Business?”
There are similarities when buying an existing business to buying a used car. If you have ever bought a used car, or anything that is pre-owned, almost always you ask the dealer why the previous owner sold the car. And then the phony reasons came from the car dealer who probably told you that the previous owner was a little old lady who only drove it church and was recently placed in a nursing home.
Business buyers also have a need and curiosity to question the owner’s decision to sell. Owners usually respond with an answer from the seller’s playbook. Variations of “I’m ready to retire,” “It’s time to do something else,” and “It’s time to give someone else a chance”.
Take note, however that if an owner’s decision to sell his or her business happened quickly, a red flag that the business is in trouble may be evident or that there are economic challenges on the horizon.
Question #2: “What Valuation Method Did the Owner Use to Determine the Asking Price?”
In every business sale, the buyer and the seller each do their own independent valuation of what the business is worth. From the buyer’s perspective, the seller’s valuation, while of interest, is not conclusive in determining a reasonable price for the company.
A seller’s valuation methodology does matter when it comes to evaluating its reasonableness. Many sellers value their business’ by an “asset-based valuation” method because it is the easiest valuation method. Unfortunately, it is also the least accurate way to determine the value of a small business. Income capitalization formulas also can be unreliable for a small company valuation.
A better approach is for a buyer to utilize a “multiplier valuation” method. If the seller also employs a multiplier valuation method, both parties enter the negotiation process on the same page. If not, the negotiation process likely becomes disagreeable. The buyer and the seller will both experience frustration because they are unable to agree on a common basis for valuation.
Question #3: “What Does the Owner Want to Walk Away With?”
It is important for the buyer to make an effort to discover what matters to the seller. You really want to know the seller’s bottom line.
Buyers who are willing to ask this question will learn about the seller’s motivations in addition to their “bottom line”. Many small business owners are as concerned about the future of their business as they are about how much money they will make.
Learning the seller’s non-cash motivations can be a powerful negotiation tool. If the negotiation process hits a wall, knowing everything that is important to a seller can sometimes close the deal.
Question #4: “Is the Seller Willing to Sign a Non-Compete Clause?”
An established customer or client base is one of the reasons existing businesses are so attractive to buyers. That incentive disappears if the owner’s intention is to sell the business and take the company’s customers with him, or to compete against the new owner.
There is no surer way to flush out a seller’s unspoken motive than for the buyer to request a contractual non-compete clause. If the seller refuses, the buyer should walk! On the other hand, if the seller agrees without blinking an eye, the existing client base can probably be used as a reliable gauge for financial projections. To learn more about non-competition clauses in a NJ contract, please visit www.njcontractattorney.com.
Fred has been my attorney since I started my business in 2003. He is always very helpful and has handled several business and personal matters for me. I highly recommend Fred.
– Wayne Sos
As you can tell, Fred knows something about business. Use his experience and that of his capable associates and staff to help make the purchase of your NJ business successful. Contact Fredrick P. Niemann, Esq. today toll-free at (855) 376-5291 or email him at firstname.lastname@example.org. Let Hanlon Niemann & Wright work for you.
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