Purchasing an existing business offers more benefits than starting a new company from scratch. Besides eliminating the stress associated with the steps to get the business off the ground, buying an existing business allows new owners to take advantage of an established customer base.
Are you seeking to purchase a business in Florida? Read on to find a full checklist.
Florida Business Purchase Checklist – The Essentials
What is the Company’s Business Structure?
If you are purchasing an existing company in Florida, the first step is to identify the ideal business structure for your project. Different business structures result in distinct rules, tax implications, and other elements that will determine whether the company will succeed or not.
Choosing a company with a business structure that does not suit your plans can negatively affect the outcome of the whole transaction.
Take time to think about your goals and determine whether you want to buy a limited liability company (LLC), corporation, sole proprietorship, or other business types available in Florida. Ultimately, the deal must be a sound investment.
Do You Know How to Use a Letter of Intent Strategically?
An often overlooked element in many business transactions, a letter of intent (LOI) is a document where the parties involved in the deal express a preliminary commitment.
This written declaration can be used by the parties involved to clarify their intentions, lay down the existing concerns, and solidify the negotiation process. With the guidance of an expert attorney, it is possible to use an LOI strategically, such as by setting clear parameters for the transaction.
Foundational elements like price, terms and even the timeline of the transaction can be determined with a well-written LOI.
Are You Ready to Proceed with a Due Diligence?
It is impossible to ensure a safe deal for both parties involved in a business purchase transaction without proper due diligence. This term refers to the process of in-depth research to determine whether the company being sold is a good investment.
Please note that this process is complex and requires a significant level of expertise, as it will require a full assessment of the company’s:
- Legal status
- General assets and liabilities
- Existing business contracts and leases
- Certificate of good standing
- Organizational structure, culture, and communication
- Licenses and permits
- Zoning matters
- Financial statements
- Business records
- Overall background and reputation
- Equipment and inventory
As it is plain to see, trying to navigate this process on your own is not hard, as the assistance of a well-versed legal advisor to conduct the research is fundamental.
Are You Paying Attention to Red Flags?
Be careful not to buy a business that someone is trying to get rid of. Make sure to check the company’s background to identify red flags like:
- Lack of proper documentation
- Lack of clear market direction
- Negative customer reviews or poor reputation
- Poor equipment and inventory
- Suspicious absence of financial records
- High employee turnover rate
- Unwillingness to carry out certain steps
- Constant pressure to close the deal rapidly
Buying a Business in Florida? – Work with an Expert Attorney to Ensure a Successful Outcome
With years of experience in legal counseling focused on business transactions, Attorney Romy B. Jurado is willing to help you. Contact us by calling (305) 921-0976 or emailing [email protected] to schedule a consultation.
