Selling the Assets in Your Business
By Lane V. Erickson, Idaho Business Attorney
As the premier Idaho business law firm our attorneys are often involved in transactions with a variety of businesses, business owners, investors, and other individuals. One of the common business transactions that we assist with is when a business is selling some or all of the assets in the business to another business or another individual. Sometimes this is done because the business owns property that it no longer needs. Alternatively, a business may need to raise cash in order to move in a different direction or to continue its business operations. Whatever the reason, our goal is to complete the transaction in a way that benefits our clients and protects their business and other interests at the same time.
For more than 70 years the team of business attorneys at the Racine law office have worked with clients in the creation of numerous businesses including LLCs, assumed business names, corporations and partnerships. We have guided numerous clients through the process of protecting a business in all kinds of circumstances and transactions. Our team of attorneys includes partners Lane Erickson and TJ Budge, and attorneys Nate Palmer and Dave Bagley. Our attorneys are each skilled, knowledgeable, and experienced in assisting clients with all of their business needs and transactions.
The purpose of this article is to discuss the steps necessary and completing a transaction where you are selling some or all of the assets in your business. We discuss exactly what the transaction is that’s involved when you are selling business assets. We also talked about the transaction documents that are involved when you are selling business assets. Finally we discuss the corporate documents that will be involved to make sure that proper records are being kept. This article is not designed to be comprehensive, but rather is simply available to give you a summary of the transaction of selling business assets as a way of helping you. However, if you are selling business assets we strongly recommend that you consult with a qualified Idaho business law attorney to help you through the process and to protect your business interests.What Exactly is the Transaction
So what exactly is the transaction when you are selling assets of your business? The reason we start with this question is because there is often confusion with business owners about what the transaction actually involves. In some instances, I will have a client come to me indicating that they want to sell an asset of their business and they bring to me the proposed documents they have received from the other party. Sometimes when I review these documents I realize that the other party believes they are buying the entire business, rather than just an asset in the business.
There is a distinct difference between selling your business, and selling an asset in your business. Because of this, when we assist a client with a business transaction such as selling a business asset, we make sure we are protecting the business itself and all of the remaining assets that are not involved in the transaction.
This is one of the main reasons it’s important to rely on the expertise of a qualified Idaho business law attorney. By utilizing a qualified attorney, you can be assured of exactly what the transaction is. In this way, there are no surprises, and your attorney can cancel you on the details and exact nature of the transaction so that you understand it completely.The Transaction Documents Involved
Assuming everyone is on the same page and that everyone understands that the transaction only involves assets of the business and not the business itself, we then move forward and discussing what documents are involved in the transaction. We usually suggests that our clients prepare a list of the assets that are being sold. This list is needed details so that the party seeking to purchase these assets can have all the information they need about those assets.
We then usually prepare a purchase and sale agreement with the details of what the transaction is. Again, using a qualified Idaho business lawyer will help you understand the language that’s in this document and what it means. Additionally, your lawyer can help you negotiate the terms of the transaction, and make any revisions or amendments to the documents that need to be made so that they properly reflect the transaction. When real estate is involved, the documents included will include deeds, title insurance, legal descriptions, and so forth. When personal property is involved, the documents would include a bill of sale, as well as any certificates of title for vehicles or other titled property.
It’s possible that other transaction documents may be included as well. This could include real estate disclosure forms, inventory list, machinery and equipment list, tax documentation for specific assets, insurance information and so forth. Qualified Idaho business attorney will understand these documents and do exactly what will be needed to help you complete the transaction in the way that will provide the best protection for you and your business.The Corporate Documents Involved
In addition to completing the transaction documents that may be involved, you may also need to have corporate documents completed as well. These could include corporate resolutions showing that all of the owners agree to the sale of the specific assets that are listed. These documents may also include the corporation signing many of the documents listed above. Additionally, as it relates to specific assets, you may need to provide the corporate documents associated with that asset. This could include the tax documentation or insurance information or other information for the specific asset involved in the transaction.
We have helped numerous business clients negotiate, set up, and complete a transaction involving the sale of an asset of a business. If you are considering selling an asset from your business, we are confident that we can help you too!Enlist an Idaho Business Attorney to Help You
Our team of Idaho business lawyers can help you with any of your business structure or operation needs. Whether you are seeking to create a new business or review a current business, we are available to discuss your options and answer your questions at an initial consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a consultation. You can also email us directly at firstname.lastname@example.org or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho business problems.