Business Purchase and Sales

Purchase or sale of a business is a complicated process for which experienced legal counsel is essential.  When representing clients in such transactions, our attorneys start the process by learning as much as possible about the buyers’ objectives in the transaction in order to provide advice on a comprehensive set of issues ranging from business matters and financial risks to legal hurdles.  Our goal is to identify possible challenges and advise clients on options for establishing safeguards to prevent issues that may arise during the contract  negotiations through the due diligence phase to the final closing.

There are two primary methods of transferring ownership of a business, either by sale of the businesses’ assets or by the transfer of ownership of the entity itself, and we work with clients on identifying the pros and cons of both:

Asset Purchase Agreements (APA)

This is a form of a business sale where instead of purchasing the shares of stock of the company, the buyer purchases some or all of a specific list of assets of the company and in some cases, assumes specific liabilities.  There are a number of issues that can arise in such transactions such as accurately identifying inventory, accounts receivable and payable, the condition of assets, and negotiating lease of premises that must be addressed in the agreement. 

Share Sale Agreements

In a share sale of a business, the purchaser is buying the shares from the shareholders of the company or membership interests from the members of a limited liability company.   Purchasers generally prefer not to buy shares in order to minimize both tax and legal liability issues.

Non-competition provisions

Purchasers will often want to require a provision in the Agreement which prohibits the individual owners of the seller from competing with the business after the sale.   The duration and geographic limitation of such provisions are negotiated by the parties.  Courts will require such provisions to be reasonable so to not impinge on commerce and trade.

In addition to negotiating, drafting and reviewing business sale offer letters and agreements, we advise and assist business owners and investors with a wide range of issues including:

  • Advising on practical business and financing issues related to the transaction
  • Assisting with the selection of the right business entity, such as partnership, Limited Liability Company, S-Corporation or C-Corporation to secure the most desirable tax benefits and liability protection
  • Advising on employment matters attendant to business transactions including contingency on the continued employment of employees and relocation issues
  • Advising on discovering and managing liens and other corporate liability issues
  • Negotiating terms and structure of earn-outs as part of compensation for sellers
  • Advising on the laws of local jurisdictions affecting the business as well as any applicable licenses and permits required for legal operation of the business

Other important matters to consider include assignment of the business trade name, transfer of customer lists, transfer of digital media assets, such as web pages, social media pages, domain names, and passwords, training of new owners and staff, and introduction of new owners to important business contacts. 

Given the complexity and scale of the issues involved in the sale of a business, it’s critical for both purchasers and sellers to retain an attorney with knowledge and expertise in such matters to guide them through the process and safeguard their interests.



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6 City Center, Suite 400, Portland, ME 04101
| Phone: (207) 772-5845
746 High Street, Bath, ME 04530
| Phone: (207) 386-0400

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