What Happens When There is a Legal Dispute in the Sale of a Business
As a business owner and entrepreneur, the sale of a business can be one of the most thrilling activities of the job. Unfortunately, these business transactions can oftentimes lead to a dispute. Although these disputes can often be resolved amicably with clear and direct communication with the other party, some disputes can be difficult to resolve when the interests of both parties are not aligned.
Common Causes of Disputes Following the Sale of a Business
Even with a carefully drafted contract and a strongly defined business relationship, some business disputes can be virtually unavoidable for a vast majority of businesses. While some disputes can be easily resolved, others can require extensive negotiations in order to be mutually agreeable.
The following are common causes of disputes following the sale of a business: Lease or other real estate issues, Unfair business practices, A misrepresentation of the financial state of the business, Unfair competition following a violation in the non-compete agreement, The failure to comply with the terms established in the Purchase Agreement, The concealment of important information, which should have been disclosed and/or Fraud with regard to the extent of historical sales or the business’ customer base.
Preparing to Sell a Business: Due Diligence is Required
Avoiding issues and disputes in the aftermath of the sale of a business will require diligence and transparency. Sellers have to be particularly careful with the representations they make throughout the transaction. Due diligence is necessary when selling a business. Due diligence, with respect to the seller, should include thoroughly investigating the buyer’s financial capacities to complete the transaction.
As a seller, it is important to keep the following issues in mind: Ensure payment for the sale is made, particularly when the payments are deferred, Avoid the possibility of buyers later making claims because the business has failed to meet their expectations, Avoid liability with former employees, vendors, and customers, The significance a purchaser’s due diligence can have, as they can sometimes be burdensome and have serious legal repercussions.
Obtaining Legal Assistance From a Business Litigation Law Firm
Disputes often result from a lack of information as well as a lack of trust throughout the transaction. The sale of a business can involve various complex issues, such as contract interpretation. As a result, it is necessary to have the legal support of an experienced and skilled law firm work for your company. A proficient law firm will ensure your interests as a business owner are protected.
Milligan, Beswick, Levine & Knox, LLP have represented both small and large businesses throughout every phase of their litigation process. If you are a business owner who is considering selling your business or if you have already sold the property and are now facing a legal dispute, you will need the legal assistance of a well-versed law firm. Consider contacting the business law attorneys at Milligan, Beswick, Levine & Knox, LLP today for a no-obligation consultation. The firm will conduct your due diligence on your behalf and ensure your interests are protected throughout the entire transaction.
James Lawrence Knox is a partner at Milligan, Beswick, Levine & Knox, LLP. For almost three decades, Mr. Knox has been providing aggressive legal representation to clients facing criminal charges, as well as individuals involved in family law issues or facing administrative law proceedings. Mr. Knox, along with the other members of our legal team, is firmly committed to putting the needs of clients first and has a long and distinguished track record to show that he is a skillful litigator and knowledgeable legal professional.