Years of building a business take actual and sweat equity. Over time, the company becomes successful, getting the attention of potential buyers. The option of “cashing out” is appealing.
That dream coming true can become a nightmare when disputes arise during the purchasing process. From jurisdictional conflicts to contract language interpretation, issues can slow or stop the process. Many are resolved without rancor, while others are rife with serious disputes that may lead to litigation.
How business sales disputes evolve
Contentious issues that involve accusations of misrepresentation can take many forms and include:
- Violating the purchase and non-compete agreements
- Hiding undisclosed information
- Accusations surrounding unfair business practices
- Fraud in reports regarding customer base and historical sales
- Real estate and leasing problems
Full disclosure is of paramount importance for a successful sale, particularly when it comes to the financial condition of the business. From pending disputes with vendors to the state of the business site, both buyers and sellers should focus attention on all details.
Communication is key
Communication between both sides is critical. Sellers must tread carefully when making representation during the actual transaction. Those steps start with a thorough review of the buyer’s ability to actually come up with the money for the sale and complete the transaction. Accountants and other financial professionals can comb through the specific details.
While some companies promote the ease of their sales processes, handing over a business requires careful planning and attention to all details. In the end, the best advocate is a lawyer with comprehensive experience in this area of business law. The stakes are far too high to go at it alone without an attorney at your side.