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 |  | Do-It-Yourself Forms: Under $60 |  | Having an Attorney Review an Agreement: $100-$400+ |  | Having an Attorney Draw Up a Contract: $1,000-$4,500+ |
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A business purchase agreement (or stock purchase agreement for a corporation) is used when a buyer is acquiring an entire business, its assets and its liabilities, including its debts and obligations such as unpaid taxes or potential lawsuits. However, the most common arrangement for buying a small business (and often the most beneficial from a buyer's perspective) is an asset transfer agreement, where the buyer purchases specific assets (or all the assets) of a business, but not the entire entity.
Typical costs: | - Sample purchase/transfer agreements are available from FindLaw.com[1] and the US Federation of Small Businesses Inc.[2] Generally these samples are considered an informational starting place in creating a written agreement; the exact requirements for a legal contract vary in each state and must be followed for the agreement to be valid. Companies such as LawDepot.com[3] or MyTechnologyLawyer.com[4] sell online forms that you can adapt to your circumstances for $20-$60 and up, depending on the amount of advice/service included.
- Having an attorney draw up a business purchase contract or an asset transfer agreement often requires at least 10-15 hours of the lawyer's time at an hourly rate of $100-$300, for a total of $1,000-$4,500. That's a starting point for a straightforward agreement with revisions. More complex agreements or those with a lot of changes will take more time and therefore cost more.
- Having an attorney review an agreement proposed by the other party could take an hour or more, starting around $100-$400 and going up depending on how much work is involved and your attorney's hourly rate.
Related articles: Licensing Contract, Accountant, Business Tax Preparation
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What should be included: | - The process of selling a business takes a minimum of several months. Among other steps, you will want a potential buyer to sign a nondisclosure/confidentiality agreement before providing details about your business operations. The nonprofit group Score lists 12 crucial steps for selling a small business and FindLaw.com outlines the advantages and disadvantages of an asset transfer compared to a purchase[5] .
- Each aspect of a purchase agreement can have tax or other implications, so many experts recommend having legal advice from the first stages of negotiating a business or asset purchase agreement. The document itself is likely to be both long and complicated; for more elaborate deals, the contract plus attachments can be hundreds of pages long. Usually the buyer's lawyer provides the initial draft of the agreement; then the seller reviews the document with another attorney and suggests possible revisions. Lawyers.com provides an overview of the sale process.
- A typical agreement should include such items as a list of the assets being sold, the purchase price, a list of inventory and specific financial arrangements (in as many as 90 percent of all sales of small businesses, the seller provides some of the financing for the buyer). The Small Business Administration offers a checklist[6] of what should be part of the agreement and a Colorado attorney provides a glossary[7] of common terms.
Shopping for a business sale attorney: | - In business law, attorneys who handle legal disputes are litigators while those who handle contracts, securities and other business matters are transactional lawyers. An Illinois attorney provides tips for selecting[8] a business lawyer.
- Referrals to business attorneys are available from Lawyers.com[9] and FindLaw.com[10] .
- Your attorney should provide you with a written fee agreement; be sure you understand what is or is not included, and all potential costs.
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What People Are Paying - Recent Comments |
| Posted by: Mahshid fotouhi in Mequon, WI. | Posted: July 24th, 2015 03:07AM |
| Fee Per Hour: ?? |
I need an lawyer that is affordable our first business and don't have much to spend. |
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| Posted by: Mike Hunt in HOT SPRINGS NATIONAL PARK, AR. | Posted: December 13th, 2014 10:12PM |
Why just save money on Attorneys, Contracts are just words on a paper, and you know how to read. Think of all the money you can save by doing your own surgery as well, all it really is is just cutting and stitching, and you know how to sew. I say fire all the professional and Google your way to freedom and wealth. |
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| Posted by: Mark Chatow in Newport Beach, CA. | Posted: June 25th, 2014 11:06AM |
| Type: | Law Firm: Chatow Law |
| Fee Per Hour: 295 |
As a practicing business sale attorney I can shed some light on what firms are actually charging for business sale law transactions.
Most clients on the buyer's side engage with an attorney to negotiate a lower purchase price, draft a letter of intent and purchase agreement, review legal due diligence, guide them through escrow, identify any red flags, and protect their investment.
They will often also engage with a business sale attorney to form the entity they'll use to purchase the business (an LLC or Corporation) and to draft employment agreements, negotiate the lease terms, trademarks, and draft internet terms.
I offer my clients three package estimates that include some or all of the services above so they will have a clear idea ahead of time what the cost will be.
My core transaction package runs $5.695. If a client is forming a corporation or LLC at the same time, the cost is $6,995. Including internet terms, trademarks and employment the estimate is $11,995. |
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External Resources: | - smallbusiness.findlaw.com/business-contracts-forms/sample-sales-contract.html
- www.usfsb.com/downloads/forms/purchase.pdf
- www.lawdepot.com/contracts/business-purchase-sale-agreement/?loc=US
- www.mytechnologylawyer.com/cgi-bin/FormManager/WebForms.pl?Session=MTL.12131734929...
- lawyers.findlaw.com/lawyer/practice/Business-&-Commercial-Law
- www.sba.gov/category/navigation-structure/starting-managing-business/starting-busi...
- www.businesslawyercolorado.com/PracticeAreas/Glossary.asp
- www.illinoisbusinessattorney.com/articles/selecting_business_attorney.html
- www.lawyers.com/business-law/find-law-firms-by-location/
- lawyers.findlaw.com/lawyer/practice/Business-&-Commercial-Law
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