Do I Need To Consult With A Lawyer If I Am Selling My Business?

By March 8, 2019Small Business

If you are preparing to sell your business, you might not be considering retaining a Las Vegas business attorney to assist you with the transaction. However, you should be. In fact, meeting with a business lawyer should be a top priority because you want to ensure you are protected from any future risk of litigation.

Some business owners want to cut corners while hoping to save money when selling a business. They assume that once it’s sold, any ties to the business are cut and they have no future liability. This is not always the case, which means you have to properly prepare so you aren’t surprised with a lawsuit down the line.  

Pending Litigation Must Be Disclosed

In the event you have pending litigation while you’re trying to sell, hiding that information is not only unethical, it’s illegal. Your Las Vegas business attorney knows methods to inform potential buyers of this information without scaring them away. However, if you don’t disclose the information to your attorney, they can’t disclose this to potential buyers as required. This means you could be facing a lawsuit for failure to disclose if you don’t come clean to potential buyers from the start.

Don’t Withhold Information From Potential Buyers

Disclosing information extends beyond pending litigation. If there is information that a potential buyer should know, it needs to be disclosed. There is a misconception that withholding information will help avoid litigation, but that couldn’t be more wrong. Withholding information almost ensures you will be facing a lawsuit down the line.

Hypothetical information that should be disclosed includes:

  • The current business lease ends in a year and the landlord has already said they plan to increase the rent by 30%.
  • The six biggest customers control 75% of the business.
  • The current director, who is second in charge, plans to retire in 15 months and no one else is currently third in charge.  

Keep Detailed Documentation

Another way a Las Vegas business lawyer can assist is to verify that the closing documents are comprehensive and complete. Everything should be in writing and as extensive as it needs to be for the particular situation. If you ignore potential issues before the closing, it could result in costly litigation down the line.

Maintain Confidentiality

You should always keep information strictly confidential when selling your business. It is not a failsafe in preventing the buyer from suing you down the line, but it does help shield your business from the fallout if the sale is put on hold or canceled completely. Negotiations have to be handled delicately or you could see fallout to your business if clients, employees, and/or vendors find out you’re attempting to sell.

Retaining A Las Vegas Business Attorney

Selling your business comes with risks, and that’s why it’s important to hire a Las Vegas business lawyer to assist with the process. Using an experienced business litigation attorney can help streamline the process and help reduce the risk of future litigation. If you are preparing to sell your business, contact the H1 Law Group at 702-608-3720 to schedule a consultation.