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Business Law

“Look on every exit as being an entrance somewhere else.”

- Tom Stoppard, Rosencrantz and Guildenstern Are Dead

Selling a Business

Selling a Business

Selling a business is a complex legal and financial process that transfers ownership, assets, and liabilities from one party to another. Successful sales require careful planning, due diligence, and compliance with contractual and regulatory requirements.

Main methods of sale:

  • Asset sale – Buyer acquires specific assets (equipment, inventory, intellectual property). Seller keeps the legal entity.

  • Stock or share sale – Buyer purchases ownership interest in the company. Seller transfers the entire entity, including obligations.

Other strategies:

  • Mergers & acquisitions (M&A) – One company acquires or combines with another. These transactions often involve antitrust review, securities regulation, or succession planning.

Key legal considerations:

  • Reviewing and transferring contracts (leases, vendor agreements, employment agreements).

  • Complying with employment and tax laws.

  • Securing regulatory approvals when required.

  • Drafting and negotiating the purchase and sale agreement (PSA), which sets terms, representations, warranties, and closing conditions.

Because of the financial and legal risks, buyers and sellers typically work with attorneys, accountants, and business brokers to conduct due diligence, protect their interests, and ensure compliance.

Closing a Business

Closing a Business

Closing, or dissolution, is the legal process of winding down operations, paying debts, distributing assets, and formally ending the existence of the entity. Proper closure avoids tax liabilities, penalties, or claims from creditors and employees.

Typical steps include:

  • Filing articles of dissolution with the state.

  • Canceling licenses and permits.

  • Paying outstanding legal or financial obligations.

  • Notifying employees and complying with federal or state employment laws (such as WARN Act notices).

  • Settling debts and distributing any remaining assets according to ownership agreements or statutes.

  • Closing IRS and state tax accounts, filing final tax returns, and paying taxes owed.

  • Formally terminating or assigning contracts and leases.

Failure to properly close a business can leave owners personally liable for taxes, debts, or lawsuits.