When purchasing a business, there are many issues which need to be taken into account. This is true whether the buyer is purchasing the entity, such as a corporation or LLC, or just the assets. This blog entry is focused on what questions to ask when purchasing a business. Future blog entries will address the specific decisions to make regarding these questions. Hopefully, by reviewing these blog entries, you will learn enough to see the importance of getting good legal counsel when purchasing a business.
When considering purchasing an existing business, a common question arises regarding whether to purchase the assets of the business or to purchase the business entity itself. For example, if purchasing a small sandwich shop which is owned and operated by Acme Corporation, should the buyer purchase the assets of the sandwich shop or should the purchaser buy the stock of Acme Corporation? As with many questions under the law, the answer is that "it depends" and the purchaser would be well-advised to seek legal and financial advice.