Purchase/Sale of a Business

Business Law Areas

The purchase or sale of a business can be a complicated.  If you are considering buying or selling a business, there are a number of things to consider.  First, there are two primary methods of transferring ownership of a business, either by sale of the businesses’ assets or by the transfer of ownership of the entity itself.

Asset Purchase:  This is a form of a business sale where instead of purchasing the stock of the company, the buyer purchases specific assets of the company and assumes specific liabilities.  There are a number of issues that can arise in such transactions that must be addressed in the Asset Purchase Agreement, such as inventory, accounts receivable and payable, condition of assets, and lease of premises. 

Purchase of Shares:  In a stock purchase arrangement, the buyer is purchasing the company's equity from its owners.   The purchase of a company's stock generally includes the assumption of the company's liabilities.  To avoid the assumption of liabilities and to minimize legal and tax liability, purchasers sometime prefer to purchase a company's assets rather than its stock.

Other important matters to consider include assignment of the business trade name, transfer of customer lists, training new owners and staff, and introduction of new owners to important business contacts.  Buyers will often require a non-competition provision in the Asset Purchase Agreement which prohibits the sellers from competing with the business after the sale.   The duration and geographic limitation of such provisions are negotiated by the parties.  Courts will require such provisions to be reasonable to avoid impinging on commerce and trade.

Given the complexity and number of issues involved in the sale of a business, it is critical that both buyers and sellers retain an attorney with knowledge and expertise to guide them through the process and safeguard their interests.  


Our Firm

The Law Office of Cheryl Gabes Rice, LLC provides knowledgable and comprehensive guidance to assist clients throughout the entire purchase and sale process, from the initial discussions and structuring of the transaction, through the proposal process, negotiation of the terms of the deal, the due diligence phase and the final closing. We are particularly skilled at assisting clients through the due diligence phase of the transaction.  We assist our seller clients on legal strategies to address issues raised during the due diligence process. We advise buyer clients on the need to conduct a due diligence assessment of the prospect in order to determine the feasibility of the acquisition. In addition, we frequently assist buyer clients in obtaining acquisition financing.

We also provide advice on a variety of other issues related to purchase and sale transactions, including:

  • Advising on financing issues related to the transaction
  • Assisting with the selection of the right business entity to secure the most desirable tax benefits and liability protection
  • Advising on employment matters attendant to business transactions
  • Advising on managing liens and other corporate liability issues
  • Negotiating terms and structuring earn-outs as part of compensation to sellers
  • Advising on the laws affecting the business, as well as any applicable licenses and permits required for legal operation of the business


The materials appearing in this website have been prepared by the Law Office of Cheryl Gabes Rice, LLC for informational purposes only. The information you obtain at this site is not, nor is it intended to be, nor should it be construed as, legal advice. Transmission of this information is not intended to create, and receipt does not constitute, an attorney-client relationship. You should consult an attorney for advice regarding your individual situation.

The Law Office of Cheryl Gabes Rice, LLC is located in West Hartford, Connecticut and serves all of Hartford County including, but not limited to, Avon, Berlin, Canton, Cromwell, Farmington, Glastonbury, Newington, Plainville, Rocky Hill, Simsbury, Southington, Wethersfield, and surrounding towns.

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