Statistics from the Bureau of Economic Analysis show that Florida is solidly ranked as the fourth-largest economy among the US states. In this fertile business environment, investing in a business purchase can be an excellent choice for entrepreneurs willing to work hard and thrive.
Is an attorney necessary to buy a business in Florida? Read on to find out.
Advantages of Purchasing a Florida Business – An Overview
Over 90% of all companies established in Florida are small businesses, which makes them the foundation of the state’s economic structure.
According to data from the US Small Business Administration (SBA), these businesses employ more than 3.6 million individuals, which represents more than 41% of Florida’s workforce.
When compared to other states, Florida has one of the lowest tax burdens nationwide. The Sunshine State has no personal income tax, which makes it a haven for owners of limited liability companies (LLCs) and S-corporations.
Even though taxes on rented or purchased goods exist, the average sales tax can be considered moderate. Still, Florida law applies for sales tax exemptions on several products, such as:
- Business machinery & equipment
Do You Need an Attorney to Buy a Business in Florida? – In Detail
Florida law does not necessarily require hiring an attorney on transactions involving the purchase or sale of a company. However, working with a well-versed business lawyer will guarantee a smoother transaction and avoid pitfalls involved in the process.
Generally, investors prefer to purchase an existing business due to the fewer risks compared to starting a company from scratch.
Before signing the closing documents, the aspiring business buyer must proceed with proper due diligence. The first factor is to consider whether acquiring the company will likely result in a lucrative deal. This assessment process requires an in-depth analysis of several aspects, such as:
- The company’s financial situation (including income & taxes)
- The company’s customer base
- How the business was structured
- The existence of legal liabilities (e.g., pending lawsuits)
- Whether the outlook for the business and its industry is positive
- Zoning matters
- Whether the business functions with proper licenses and permits
- The business operations
- The assets involved in the transaction
- The business reputation
While buying an existing business result in fewer start-up costs, there are several factors to consider in terms of existing liabilities and potential issues that may arise in the future. Before you get involved, in-depth business research and analysis cannot be taken for granted.
Another crucial aspect of a business purchase is dealing with the tax implications. Anticipating the impact of taxes and tailoring a solid strategy to ensure a positive outcome requires a superior level of legal expertise, which only a lawyer can provide.
A well-versed attorney can also help conducting the negotiation process and handle the required paperwork to guarantee all the parties involved are aware of their duties and ensure full legal compliance.