I want to purchase a small online business. I'm not sure where to begin.

Hi *******, my name is Dolan, and I’d be happy to help with this. I carefully review each question and provide responses based on my years of hands-on experience as a lawyer.

I completely understand how purchasing a business for the first time can feel overwhelming, especially the legal side of the house.

Just to clarify a few things I have a better sense of the situation and can give you a good answer.
1. Are you purchasing the business (assets, liabilities, etc) or just the assets?
2. Do you have a general idea of how the business is structured, like an LLC, corporation, etc?
3. What exactly do you know about its operations so far-customer base, revenue history, or anything else?

Got it. Thank you for those answers.

Did you need to tell me anything else? If not, I can start with answering your question.

Alright, let’s break this into clear steps to guide you through purchasing this online business:

1. Due Diligence
Since you’re purchasing the business as-is, due diligence is really important. This means reviewing the business's finances, operations, assets, and liabilities. Some areas to focus on include:
- Financials: Request profit and loss statements, tax returns (try for 2 to 3 years back), and a breakdown of current debts.
- Assets: Understand what assets you are buying (ex:, website domains, inventory, intellectual property, or customer lists).
- Liabilities: In an asset purchase, you typically don’t take on liabilities. But since want to purchase the LLC as-is, any debts, pending lawsuits, or liabilities come with it. Have the seller disclose these in writing to you.

2. Letter of Intent
The LOI is a formal document that outlines your interest in buying the business and the basic terms of the deal. It signals to the seller that you are a serious buyer. Key components of an LOI include:
- The purchase price or range.
- Key terms of the sale (assets and liabilities).
- A confidentiality clause to protect sensitive business information.
- Timeline for closing the deal.
- A due diligence period.
I can provide a draft LOI template later if needed.

3. Drafting a Purchase Agreement
Once the LOI is signed, you’ll need a binding purchase agreement. This outlines the exact terms of the sale, including:
- Purchase price and payment terms.
- Exactly which assets/liabilities transfer to you.
- Representations and warranties from the seller (confirming financials, no undisclosed liabilities, etc.).
This document protects you in case of misrepresentation.

4. Legal Structure and Operations
Since it’s an LLC, you’ll need to decide if you’ll keep the existing LLC or transfer assets into a new one. A lawyer or accountant can help evaluate the risks of keeping it as-is.

5. Closing the Deal
The final step involves signing the purchase agreement, transferring funds, and formally transferring assets and ownership.

Great question! The LOI can be quite simple. You don’t need to include legal jargon; you just need to outline the key points of your offer.
Here is a template ContractsCounsel has for sale on the site: https://www.contractscounsel.com/d/contract-template/12/non-binding-business-purchase-loi
If you want, buy this template, fill it out, and I can take a quick look at it.

Perfect. Let me know when you’re ready to start that.
Regarding due diligence, have you discussed a timeline with the seller for providing financials and other documents?

Understood. I recommend politely requesting a firm timeline. Something like:
“I’d like to move forward with due diligence and can get started as soon as you provide the financials. Can you let me know when you’ll have those ready?”

Good question.
If you’re buying the LLC (as-is), undisclosed liabilities become your responsibility (like debts you don't know about). This is why having a “representations and warranties” in your purchase agreement becomes important. Reps and warranties legally require the seller to confirm that all financials, debts, and other details they provided during due diligence are accurate/complete. If they aren't truthful or leave something out, you may have grounds to sue for breach of contract.

Yes, a few key things to consider post-purchase:
1. Transfer Operations: Ensure access to all logins, customer accounts, and assets.
2. Business Licenses/Permits: Confirm you have all necessary permits to operate the business.
3. Taxes and Accounting: If you’re new to this, hiring an accountant will save time and headaches.

That sounds like a solid plan. When you have your LOI draft ready, feel free to share it with me-I’d be happy to review it.

If you’re happy with the advice I provided, I’d really appreciate a review! Let me know if you need help down the line.