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Buying a Business - Need to know the process

A detailed account of a Fastlane process...

payingkarma

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Hello Fastlaners,

I'm in the process of buying an offline business in the construction niche. So far everything looks good from the due diligence I did.

It's going to be an asset sale. I'm buying equipment, customer and vendor list and taking on the experienced crew.

1. When I did the UCC1 search I find the Merchant Cash advance company put a blanket lien. Even though they are after A/R and taking a % of cash deposited, the language includes " tangible and intangibles" in it. How do I make the asset sale and trigger any unwanted issue?

2. I've a question with the closing process - I execute the "purchase and sale agreement" and the "Bill of Sale" and is there anything else I need to put in there?

3. What should I do to be absolutely sure that I am not getting any "Successor Liability" issue?

Thanks,
 
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Jechua

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The sale and purchase agreement should include representations and warranties from the seller where you can get a guarantee/indemnity from the seller protecting you from assigned liabilities. Your lawyer should be able to advise you on this.
 

100k

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This guy would probably be able to help you!

Check out his free content on youtube.


And get on a call with him when you're ready...


I believe it will be better than any advice you'll get from random strangers on the internet. Pay and speak with an expert that buys and sells businesses for a living.
 

payingkarma

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Sep 16, 2019
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This guy would probably be able to help you!

Check out his free content on youtube.


And get on a call with him when you're ready...


I believe it will be better than any advice you'll get from random strangers on the internet. Pay and speak with an expert that buys and sells businesses for a living.

Thanks for the idea. But Why talk to this guy - what credentials he has? Nothing... Besides, he is in Canada and not US.

If I want to get the expert opinion route, I would use a lawyer.
 
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payingkarma

Bronze Contributor
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Sep 16, 2019
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The sale and purchase agreement should include representations and warranties from the seller where you can get a guarantee/indemnity from the seller protecting you from assigned liabilities. Your lawyer should be able to advise you on this.

Yes, I'm getting the Reps & warranties - and using indemnity protection. Thanks for that suggestion.

There are few others that will not be subject to reps & warranties and will transfer liability to the buyer, even if it's an asset sale. I'm trying to what those might be and trying to stay clear of it.

Again, not trying to use a lawyer.
 

100k

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Thanks for the idea. But Why talk to this guy - what credentials he has? Nothing... Besides, he is in Canada and not US.

If I want to get the expert opinion route, I would use a lawyer.

Mmm'kay
 

Scot

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Tourmaline

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doitman

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Hello Fastlaners,

I'm in the process of buying an offline business in the construction niche. So far everything looks good from the due diligence I did.

It's going to be an asset sale. I'm buying equipment, customer and vendor list and taking on the experienced crew.

1. When I did the UCC1 search I find the Merchant Cash advance company put a blanket lien. Even though they are after A/R and taking a % of cash deposited, the language includes " tangible and intangibles" in it. How do I make the asset sale and trigger any unwanted issue?

2. I've a question with the closing process - I execute the "purchase and sale agreement" and the "Bill of Sale" and is there anything else I need to put in there?

3. What should I do to be absolutely sure that I am not getting any "Successor Liability" issue?

Thanks,

You always want an indemnify clause in your sales agreement. Talk to a M&A lawyer, even just for a consult. You can get free ones. What details did you find for the lien? Like for how much and for what?
 

Greg R

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Hello Fastlaners,

I'm in the process of buying an offline business in the construction niche. So far everything looks good from the due diligence I did.

It's going to be an asset sale. I'm buying equipment, customer and vendor list and taking on the experienced crew.

1. When I did the UCC1 search I find the Merchant Cash advance company put a blanket lien. Even though they are after A/R and taking a % of cash deposited, the language includes " tangible and intangibles" in it. How do I make the asset sale and trigger any unwanted issue?

2. I've a question with the closing process - I execute the "purchase and sale agreement" and the "Bill of Sale" and is there anything else I need to put in there?

3. What should I do to be absolutely sure that I am not getting any "Successor Liability" issue?

Thanks,
@Greg R you have very specific insight into this.

Bro, it's called indemnification. Your lawyer is not going to let you have any liability from the company's past actions. Also, it is an asset sale that limits liability too. On top of that. If he sold the assets, they will be going after him for the cash because that is now his asset.

I was involved in a business deal to buy a construction company. That one fell through, but the process was documented here.

https://www.thefastlaneforum.com/co...xponential-value-gregs-progress-thread.71223/

You can also PM to chat. Even @OperationMyWay may be able to chime in.
 
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Greg R

Act, Assess, Adjust
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
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465%
Oct 28, 2015
1,060
4,933
Puerto Vallarta, Mexico
This guy would probably be able to help you!

Check out his free content on youtube.


And get on a call with him when you're ready...


I believe it will be better than any advice you'll get from random strangers on the internet. Pay and speak with an expert that buys and sells businesses for a living.
I actually got this guy on a call before backing out of my construction deal. He helped me realize I wasn't getting what I thought I was getting.
 

payingkarma

Bronze Contributor
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Sep 16, 2019
44
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You always want an indemnify clause in your sales agreement. Talk to a M&A lawyer, even just for a consult. You can get free ones. What details did you find for the lien? Like for how much and for what?
UCC1 shows no $ amount. But I verified it's for less than 20k. I'm having part of the sale price on as an earn-out. So if push comes to shove I got that covered. But just want to legally avoid.

Thanks for suggestions. I'm prolly going to vet the P&S agreement with the legal counsel.
 

payingkarma

Bronze Contributor
Speedway Pass
User Power
Value/Post Ratio
234%
Sep 16, 2019
44
103
Bro, it's called indemnification. Your lawyer is not going to let you have any liability from the company's past actions. Also, it is an asset sale that limits liability too. On top of that. If he sold the assets, they will be going after him for the cash because that is now his asset.

I was involved in a business deal to buy a construction company. That one fell through, but the process was documented here.

https://www.thefastlaneforum.com/co...xponential-value-gregs-progress-thread.71223/

You can also PM to chat. Even @OperationMyWay may be able to chime in.
Very helpful. Thanks for your inputs.
 
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