Why You Need a Lawyer When Selling a Business

Why You Need a Lawyer When Selling a Business

When selling your business, having a good lawyer is essential during the exit and sales process. Choosing the right lawyer is important to ensuring the process runs smoothly. Over the years, we have heard of many business sales falling over due to poor preparation and legal advice. 

Your best option is to engage a commercial lawyer experienced in business sales as they can bring years of experience. They would have seen many deals cross the line and can help you during your exit planning as well as negotiations and settlement. Business sales can be complex and a lawyers experience can mean a huge difference when it comes to finalising the sale.

We take a look at what a lawyer can help you with and Aspect Legal shares 5 questions you should ask a prospective lawyer for your business sale. 

 

How Can a Lawyer Can Help With Your Business Sale?
 

A lawyer can assist with everything from preparing the business for sale to ensuring a smooth sales process to handling the Contract of Sale.

Lawyers are often instrumental in the negotiation phase, helping to bring all the parties involved to the table. Business sales often involve the coordination of many parties from the buyers and sellers side, and a good lawyer can get everyone together and keep the deal moving. A slow or unresponsive legal team could lead to the business deal falling through. 

1. Pre-Sale Preparation

Before the sale process begins, a lawyer helps prepare your business by reviewing and organizing essential documents.

This includes;

• Leases
• Supplier contracts
• Employee agreements
• Trademarks and IPs
• Financial records
• Business registrations and licenses

They identify potential legal issues that could impact the sale and provide solutions to mitigate risks. Proper preparation ensures the business is attractive to buyers and minimizes delays during the sale process, leading to a more successful outcome for the seller. 

This process helps to prepare for the due diligence process. A lawyer conducts thorough preliminary due diligence to ensure the business complies with all relevant laws and regulations. This involves reviewing contracts, licenses, and permits to identify any red flags or potential issues that need resolution. This helps avoids any issues further into the negotiations. 

 

2. Drafting Legal Documents

One of the most critical roles of a lawyer is drafting key legal documents. They prepare"

• Non-disclosure agreements (NDAs) to protect confidential information during negotiations.
• Heads of Agreement (HOA) or a Term Sheet outlining the initial terms of the deal,
• Contract of Sale

These documents ensure the transaction is legally sound and include all necessary terms and conditions.

 

3. Facilitating Negotiations

Negotiations are a critical part of the sale process, and a lawyer plays an essential role in advocating for the seller’s interests. They assist in negotiating terms with the buyer or their legal representatives, ensuring a fair and favourable outcome. Their expertise helps avoid common pitfalls and ensures the seller’s position is protected. A good lawyer will keep communications open and respond in a quick and timely manner. 
 

4. Overseeing Compliance and Regulatory Requirements

During the sale, a lawyer ensures the transaction complies with industry-specific laws and regulations. This includes managing the transfer of business name and licenses, permits, and registrations required for the new owner to operate the business legally. 

5. Settlement and Closing

At the final stage, the lawyer oversees the settlement and closing process. They ensure the sale agreement is signed, ownership is transferred, and all financial transactions are completed as agreed. This includes the transfer of assets, shares, or intellectual property, ensuring all parties fulfill their obligations.

6. Post-Sale Support
 

After the sale is complete, a lawyer provides support for any remaining obligations. They advise on warranties, non-compete agreements, and other post-sale responsibilities. If any disputes or legal issues arise, the lawyer assists in resolving them, ensuring the seller’s interests are safeguarded.

 

5 Questions to Ask Your Prospective Lawyer

 

So now you know what a lawyer is required to do during the business sales process, but how do you know if you’ve found the right one? Aspect Legal recommends asking these five key questions to assess whether a lawyer is well-suited to handle your transaction.
 

"How Many Business Sales or Acquisitions Have You Completed in the Last 12 Months?"

Specialization matters. Aspect Legal emphasizes the importance of hiring a lawyer who handles business sales frequently—at least 5–10 transactions per month. A generalist lawyer might only manage a few sales a year, which may not equip them to handle the complexities of your deal effectively.
 

"How Do You Ensure Deals Run Smoothly and Efficiently?"

Your lawyer should have a structured process for managing sales, supported by clear timelines, checklists, and templates. According to Aspect Legal, a lawyer’s ability to articulate their process demonstrates their capability to move deals along quickly while ensuring no detail is overlooked.
 

"What Is the Average Timeframe for Completing a Contract?"

A specialist lawyer will be able to provide a clear timeline for completing your sale, outlining potential factors that may slow or expedite the process. This transparency helps set realistic expectations and shows the lawyer’s familiarity with navigating common transaction challenges.
 

"Can You Provide Client Testimonials in This Area?"

Testimonials from previous clients can provide insight into the lawyer’s expertise and ability to deliver results. Aspect Legal stresses the importance of choosing a lawyer with a proven track record in business sales and acquisitions.
 

"How Quickly Can I Expect a Draft Contract?"

Timeliness is critical. Once your lawyer has the necessary information, they should be able to provide a draft contract promptly. Aspect Legal recommends asking whether they guarantee a specific turnaround time, such as 48 hours, to ensure they are responsive and proactive.

 

So What Next?

Reach out to Lawyers recommended by industry professionals such as Aspect Legal. Ask potential lawyers these questions, to ensure they are capable of selling your business can streamline the process and protect your interests. 

A good lawyer does more than close the deal—they provide peace of mind throughout the journey of selling your business. 

Tags: legal advice selling a business commercial lawyers

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