Do You Need a Lawyer to Sell Your Business?

There’s a lot involved in selling your business. Not only do you need to prepare your business for the acquisition marketplace, but you also need to follow the proper legal framework to ensure that the transaction goes smoothly. This leads some owners to ask the question, “Do I need a lawyer to sell my business?” 

The short answer is: It’s almost always a wise decision to hire a lawyer when selling your business. This applies whether you own an eCommerce store, software company, or content site. 

In this article, we discuss:

• Why it’s important to hire a business attorney when selling your business
• Why some owners consider not using an attorney
• How you can find a qualified business attorney who specializes in business acquisitions

Note to reader: We are not attorneys. This information is not intended to be legal advice.

Reasons to Hire a Business Attorney to Sell Your Business

Some sellers are tempted to rely solely on their own common sense when navigating the selling process. After all, if you’ve built a successful business, you’re likely highly resourceful and able to solve new and unexpected problems. While it’s great to believe in yourself so strongly, it’s also important to not take your tendency towards self-reliance too far.

There are several key reasons why it’s typically best to hire an experienced business attorney when selling your online business.

“While it’s great to strongly believe in yourself, it’s important to not take your tendency towards self-reliance too far.”

There’s a lot at stake when selling your business

In most cases, there’s a lot at stake when selling your business. Whether your business is worth $200,000 or $20 million, it’s critical that you structure the deal properly so it’s enforceable. If you don’t have the right legal contracts in place, you may be leaving yourself exposed to significant risk. 

During a business acquisition, it’s critical that you establish an asset purchase agreement. The APA accounts for each and every detail relating to the transaction. Everything from included assets to payment terms to training responsibilities must be spelled out in detail. Many of these elements may appear to be straightforward. However, it’s critical that the contractual language is legally sound. Doesn’t it seem worth it to spend a few thousand dollars in order to protect a few hundred thousand or even millions of dollars?

“If you don’t have the right legal contracts in place, you may be leaving yourself exposed to significant risk.”

Attorneys provide clarity and confidence

If you work with an attorney who is familiar with business acquisition transactions, they can help provide greater clarity in your legal contracts and agreements. This ensures that both parties are on the same page and have the necessary legal protections in place. 

When your legal contracts are solid, it’s easier to feel confident in the entire process. Instead of leaving things to chance, you know that you have legally binding agreements to protect your interests. This is one of the key benefits of selling your business with a qualified attorney.  

“If you work with an attorney who is familiar with business acquisition transactions, they can help provide greater clarity in your legal contracts and agreements.”

Minimize the chances of a legal dispute

In addition to providing clarity and confidence, a lawyer can also help minimize the chances of a legal dispute arising later down the road. 

For example, let’s say you sell your business without an attorney helping with your contracts. Even if you uphold your end of the deal, you never know what to expect when working with a potential buyer you don’t know well. It’s not very common, but some buyers do choose to take legal action against the buyer. This can happen even when the seller has completely fulfilled their side of the bargain. If you have effective contracts in place, however, they’re much less likely to file claims that aren’t substantiated.

“In addition to providing clarity and confidence, a lawyer can also help minimize the chances of a legal dispute arising later down the road.”

Reasons to Consider Selling Your Business Yourself

Using an attorney is clearly the best choice in the vast majority of acquisitions. However, here are a couple of situations in which you might choose to not hire one.

Small business transactions

If you’re selling a $2,000 website and the attorney fees would be $3,000, it can be argued that it doesn’t make sense to hire an attorney. In such a situation, some sellers may choose to rely on simple legal forms from a template.  

On the other hand, for small businesses that are slightly larger, this reasoning obviously doesn’t apply. 

Sellers who have law degrees

If you have a business law degree and a clear understanding of the laws that govern business acquisitions, you may consider not hiring an attorney to represent you. In such a situation, you may instead decide to utilize your own expertise to create an asset purchase agreement that protects your interests in the deal.

How to Determine Whether You Should Hire a Lawyer to Help Sell Your Business

If you’ve read the sections above, you know that it’s typically best to hire a small business lawyer when selling your online business. Just as a business Advisor can help you use the right valuation metrics to value your business, an attorney can provide similar support regarding the legal aspects of the transaction.

If your business has real value and is important to you, it’s important to hire an attorney to ensure that the deal terms are clear and legally binding. More than likely, the prospective buyer will also want an attorney involved during the closing or selling process. 

“If your business has real value and is important to you, it’s important to hire an attorney to ensure that the deal terms are clear and legally binding.”

As mentioned above, owners of extremely small businesses may sometimes choose to not use an attorney when selling. Similarly, sellers who have law decrees may decide to rely on their own knowledge when creating a business contract. However, even if you have a law degree, you may still want to hire an attorney who specializes in business acquisitions.

How to Find a Lawyer to Help Sell Your Business

Once you’ve answered the question, “do you need a lawyer to sell your business,” the next step is to find the right one. There are many different types of lawyers, so it’s best to find a lawyer who is experienced with mergers and acquisitions. They’ll be more knowledgeable and better able to help you complete the asset purchase agreement and other important legal documents.

Ask for referrals

One of the best places to start looking for an attorney is within your own network. If you happen to already know a great business lawyer whom you trust, your choice may be easy. If not, try to think of a business owner who may have already gone through the process of selling their business as an asset sale. Then, reach out to see if they have any recommendations that seem like a good fit.

When you ask friends or colleagues for referrals, be as specific as possible about what you’re looking for. In other words, don’t just say you’re looking for a lawyer. Tell people you’re looking for one who specializes in mergers and acquisitions. If the attorney is also familiar with your specific business model, that’s an additional perk. Of course, be sure to follow up promptly on any introductions you receive.

“Try to think of business owners who may have already gone through the process of selling their businesses.”

Ask your business broker

Your business broker is another great resource for finding a great attorney or corporate law firm. After all, business brokers engage in a lot of deals, so more than likely, they’ll know the best attorneys to turn to for legal advice. In fact, at Quiet Light, we have a list of business lawyers we regularly refer our clients to.

“Your business broker is another great resource for finding a great attorney or law firm.”

Do your own research

If the above options don’t suffice, you can always start researching attorneys yourself. If you go this route, you may find yourself spending a lot of time interviewing various attorneys to find the right fit. In addition to looking at their previous experience and areas of expertise, it’s best to find someone who you feel truly has your best interests at heart.  

Of course, even if you receive an introduction through a friend or business broker, it’s still appropriate to vet the attorney yourself. This is especially true if the attorney isn’t as familiar with mergers and acquisitions. Read their bio, look at their previous work experience or reviews, and get on a call with them to discuss your deal.

By using your network and consulting with a trusted business Advisor, you should be able to find a great lawyer who can help protect your interests when selling your business.