Recent Answers to Business Valuation Law Questions

Christopher N.

Answered Jul 1, 2025

Legal due diligence is your investigation of the company to ensure what you are buying actually exists. For example, if you were buying an ice cream parlor, you would want to know: who owns the business (what are the documents that prove that, what are their rights as owners, do they have the right to stop the sale, are there "handcuffs," etc.); do they own or lease the property where they sell the ice cream (how is the rent paid, or the mortgage, if the business owns the property is the building a part of sale, or will the owners want rent, etc.); how are the finances structured (are there loans the business have that you will have to assume; do they have buy out requirements if there is a sale, etc.); what do the finances look like (what are the sales for the last ... 2 years, is the money properly deposited, where does the revenue come from, what are the expenses, are the expenses and the revenue real, does the cash and revenues flow through the bank accounts correctly); are you getting the ice cream recipes as part of the business; are the fixtures (ice cream makers, freezers, etc.) included; have there been any lawsuits filed agains the company -- what is the status; do they have insurance and have there been any claims againt the policies... and so on. This is just a quick example, but you get the flavor and depth of understanding YOU want to know if you are buying a business. Buy the "business" might not be the best option. For example, maybe just buying the assets of the company would be a better option to avoid liabilities. T Of course, I HIGHLY recommend you retain an attorney and accountant who specialize in business sales and has experience with business valuations and sales to ensure you truly understand what you are buying and you are protected. Buying an ice cream parlor vs buying a trucking company are completely different issues. An expereience team will help you navigate this process. Good luck!

Christopher N.

Answered Jun 20, 2025

Yes. Early repayment provisions are perfectly appropriate, but they are really a matter of negotiation with your investor. Given the likley nacent nature of your idea/business, I highly recommend you consult with a local business attorney to help you draft and negotiate the language. I also suspect you may need further legal advice as you structure your new idea/business for future growth ... and importanly, but uglier, in the event the business/idea fails. Good luck.