The Purchase or Sale of a Business

The increase of the Hispanic population in Central Florida has also created a significant increase in Hispanic entrepreneurs.  Many start their business adventure purchasing an existing business with their life savings.  Others conclude their entrepreneurial  life selling the business they established and enhanced with great effort.   Unfortunately, however, there are individuals with limited scruples that are engaged in the practice of deceiving potential purchasers or sellers of businesses.  These entities serve  as intermediaries between persons or entities that have expressed interest in either selling their business and potential buyers.  If a  transaction is consummated, the intermediary or broker, is usually paid a commission by the seller. 

I would like to be clear in that I do not profess that all companies that engage in this type of commercial activity are dishonest.   The consuming public should be mindful, however, that many employ deceptive practices and will stop at nothing to close on the transaction, regardless of whether the client will be adversely affected.  Simply stated, the priority for some of these brokers is to collect their commission, and they could care less about protecting your interest.  Hence, if you are considering purchasing, or selling an existing business whether through a broker or directly with the owner, it is essential that you take measures to protect yourself.

I’ve represented many individuals and entities that were convinced by brokers not to seek advise of counsel for the transaction.  Unfortunately, when some finally decided to seek counsel, it was too late, because the damage was irreversible.  In other cases, some of the money lost was recovered, but a total recovery was not possible.  Regrettably, in the majority of those cases, these loses could have been avoided. The purchase or sale of a business is a complex transaction that requires due diligence and legal analysis.  Whoever tries to convince you otherwise is not being truthful.  One must first decide how to structure the transaction because there are certain inherent  risks in a stock purchase.  Financial records must be reviewed and analyzed to ensure that the representations made by the contracting parties are accurate.  The Purchase and Sale Agreement must include terms that afford adequate remedies to the parties in the event of a breach.  It is mistake to utilize the so-called “model contracts,“ that can be found on the Internet.  The business world is very dynamic as is the law.  The courts establish new judicial precedents on a daily basis pursuant to which the terms in a model contract could be unenforcable.

As we celebrate the fact that there is an increasing number of our citizen  pursuing the American dream and acquiring businesses, we must be mindful that  those seeking prosperity can become victims of unscrupulous individuals .  As we seek a doctor to protect our health, we must seek a legal professional that will protect our rights.  With patience, diligence and discipline, many of us will achieve that coveted American dream.  Without proper guidance, however, this American dream could turn into a nightmare

Luis A. González
Attorney and Mediator
L. A. González Law Offices, P.A

(407) 649 - 8389
laglaw@cfl.rr.com