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Business Purchases and Sales

Our firm represents clients in the purchase or sale of their small to medium sized business. Most businesses in Florida are classified as either corporations, limited liability companies, some form of partnership, or sole proprietorships. The sale of a business can either be for the sale of the business entity itself, including its name, or for the sale of some or all assets owned by the business. In many ways, the process of buying or selling a business is similar to the process of buying or selling real estate. There is a due diligence period during which the prospective buyer can evaluate the businesses books and records in order to decide intelligently whether to make a purchase offer, then there is a more thorough examination to ensure that the records are up to date and correct on their face. During this time an accountant or other expert may be retained to inspect the financial affairs of the business and advise of any tax consequences as well as to ensure that transaction contemplated is properly authorized. The transaction is completed when the parties sign off on the deal at the closing. In all, there are at least 11 unique steps that you should follow before closing on the purchase of any business. One important step is carefully exam the seller’s business's books and records. Some examples of records you should review include:

  • Existing Contracts
  • Licenses
  • Permits and Registrations
  • Documents evidencing legal permission or authority to conduct Seller's business
  • All documentation relating to computer software used in connection with Seller's business
  • Copies of current insurance policies
  • Copies of leases for property and equipment
  • Consultant and independent contractor agreements
  • Employee files
  • List (with names, addresses, emails, telephone numbers, and fax numbers, if known) of all suppliers from whom Seller has purchased materials or equipment during the last three years
  • Financial Records
  • Tax Returns
Post-Closing Disputes

Disputes may arise following the purchase or sale of a business between the transacting parties. Often times these disputes center on the following topics:

  • The Buyer of the business demands that the Seller indemnify and defend it in a lawsuit after it has been sued by a third party for breaches of representations or warranties in a pre-existing transactional agreement
  • Earn-Outs: An earn-out agreement usually provides that the purchase price of the business is contingent on the company earning a certain amount of money or hitting certain performance targets once the buyer takes ownership and control of it. However, when the business' post-closing operations are left entirely in the control of the buyer, the parties may disagree as to the extent of the buyers' duty to make sure that the performance target is achieved. To complicate matters, even if the purchase and sale agreement does not expressly require the buyer to take action in furtherance of achieving the earn-out target, seller (plaintiffs) usually argue in court that the law imposes this obligation under the implied covenant of good faith. The implied covenant of good faith is inherent in all Florida contracts and its purpose is to fulfill the reasonable expectations of the parties that each will carry out his contractual obligations in good faith.
  • Claims for fraud in the inducement which may arise out of earn-out disputes, typically when the seller alleges that the buyer misrepresented his true ability or intention to generate revenue necessary to meet the earn-out target. 
  • Other lawsuits filed by third parties after closing stemming from facts that occurred pre-closing.

Although these disputes may be the result of unforeseeable events that are impossible to avoid, it is more often the case that these claims concern contractual terms that many businesses and their attorneys regard as “boilerplate,” and, therefore, might be overlooked during the parties’ negotiation of the transaction. Buying or Selling a business is a major investment. Moreover, post-closing liability continues to be of interest to business owners as post-closing disputes seem to be increasing in frequency in Florida and often result in a lawsuit.

Considering buying or selling a business or involved in a disagreement post-closing? Let an experienced Miami business lawyer aggressively represent you.

Client Reviews
★★★★★
I contacted Andrew for assistance with the selling of my business. He was very knowledgeable and explained the process to me during the selling of my shop. The documentation was produced very quickly and accurately which made both parties very comfortable with the process. I would highly recommend containing Andrew for any of your legal needs. K.A.
★★★★★
Andrew Pascale was assigned to my cases about 6 years prior. The magnificent work he completed through the years was amazing. He is very detailed and direct with important matters. I felt comfortable with my cases being handled by him. He kept me informed of the status and just what was going on. I am sure I'm in good hands. L.R.
★★★★★
We were having problems with collections in our business. Andy stepped up quickly to take over the process from our last attorney. J.L.

Prospective clients may not obtain the same or similar results.