I’m Purchasing a Business in Arizona: What do I Need My Attorney To Do?
When purchasing a business in Arizona, it is wise to consult with an experienced attorney who is familiar with the process and will protect your best interests in the transaction. Your attorney will be your advocate in negotiations with the sellers should you choose to buy a business and should understand your business completely as well as all of the purchase-related legal documents. They can also assist with a number of key tasks that will make the purchase much more streamlined and beneficial.
Conduct Due Diligence
Due diligence is one of the most important steps of any asset transaction, but it entails even more when purchasing a business in Arizona. As the buyer, you should initially investigate the financial performance, industry reputation and community goodwill of a business, and an attorney will be equipped to help you. Oftentimes the due diligence process will reveal why the business is being sold, so your attorney should uncover that reason in case it would negatively impact you as the buyer.
Consider these aspects of a thorough, successful due diligence process:
- Proof of all entities involved in the transaction
- Proof of authority positions for all parties signing the paperwork
- Completed judgment, lien and bankruptcy searches on all parties
- Confirmation of all seller representations
- Copies of all contracts to be passed on to the buyer
- Copies of all rental property leases and their terms, if applicable
Each transaction is unique and has its own due diligence requirements, so buyers and their attorneys should be prepared for this lengthy list of tasks.
Review the Purchase Contract
When you’re presented with the contract for purchasing an Arizona business, you will likely be confused by the legalese, so your attorney should help you understand the contract and the obligations you will have to uphold as the buyer. You may also believe the contents of the document are set in stone. However, terms can largely be negotiated up until closing, so your attorney should advocate for your interests during that time and provide suggestions that fit within your objectives and account for your concerns. As the buyer, your goals are in direct contrast with the seller’s—for everything the seller gains, you lose. Therefore, your attorney should also help you determine your priorities so you can move from negotiations to closing and owning a new business.
Ensure a Non-Compete
As the buyer, you and your attorney may want to obtain a non-compete agreement from the seller. This means the seller cannot open a new business in the same category as yours within a specified geographic area. For example, if you purchase a bakery in a strip mall and don’t have a non-compete agreement, the seller can open a new bakery just a few doors down. Your attorney needs to negotiate for this term before closing, as stiff competition can prove detrimental to burgeoning businesses.
When to Consult with an Attorney
Prospective buyers will be at a significant advantage if they find an attorney early on in the process. Your attorney can navigate negotiations and review legal documents, including buy/sell contracts that may or may not be written in your favor. Certainly consult an experienced attorney before signing on the dotted line, but having legal representation on your side can make the entire ordeal much simpler.
Find an Experience Real Estate Attorney
MacQueen & Gottlieb have significant experience with real estate transactions between businesses and interested parties. Whether you are a buyer or a seller, our attorneys can help you pursue your interests in the process and take legal action if necessary. Contact us today at (602) 726-2229 to schedule an initial consultation or make an appointment online.