By Brian Slipka | Forbes
When business transitions take place, several things can go wrong. Oftentimes, business buyers fail to secure capital, deals fall through at the last minute, or buyers try to change the terms at the eleventh hour. A grasp of the fundamentals of a sales structure can help alleviate these potential challenges.
In my years of experience leading companies through various transitions, including acquisitions and sales, I have seen what it takes to prepare a deal that satisfies all parties involved. Selling a business involves more than just the price; while price is a crucial factor, it is only one of the four essential components of a business sale that require careful consideration.
These components play a significant role in determining the post-sale tax implications. A competent deal team, which includes professionals such as an attorney, accountant and business broker, should possess a thorough understanding of these components.
“Representations and warranties are a key component of a business sale document and is often the most heavily negotiated portion of the sale agreement. Sellers must take the time to comprehend and understand what they’re agreeing to, and not overlook this section as a bunch of legal jargon.”
-Shruti Gurudanti, partner and director of corporate transactions at Rose Law Group
