Things to Watch Out For in An Amazon FBA Letter of Intent

Things to Watch Out For in An Amazon FBA Letter of Intent

Business Sale, E-Commerce
You’ve worked hard to build your Amazon FBA business but have decided it’s time to ride off into the sunset, or at least move on to your next venture. You’ve identified a suitor and, after some initial meetings, say they'll be sending you their “LOI”. You're not sure what an LOI even is, what is normally in there, or what you as a seller r should be on the lookout for. In this post, we cover what an Letter of Intent is, why it's so important, key things to watch out for, and why understanding what should (and should not) be in it is critical to your chances of a successful sale of your Amazon FBA business. Ben’s Note: Although I will refer to Amazon FBA throughout this article, the…
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Why You Should Do a Lien Search before Buying a Business

Why You Should Do a Lien Search before Buying a Business

Business Sale, Contracts, Liens, UCC
Potential buyers of businesses should take every possible step to search for and investigate potential liens affecting the acquired company's assets.  Our Phoenix business law firm's recent representation of the buyer in the purchase of a local contractor company illustrates the importance of making sure that the target business’ assets are not encumbered by liens.  Even if the transaction is structured as an asset sale, a seller’s liens might unknowingly become your problem.  What is a Lien? First thing's first: a lien is a legal right or interest that a creditor has in another person or company's property.  If you or your partners are purchasing a business and that company's assets are encumbered by a lien, a third party may have an interest in the business or the assets you…
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Do I Need a Lawyer to Help Buy A Business?

Do I Need a Lawyer to Help Buy A Business?

Business Sale, Contracts, Letter of Intent, Sale of Business
Months ago, I was asked by some LLC members to review and make changes to their company's operating agreement. They also told me they were "in the process" of buying an established local company from its owner and that they might want my firm's help on that "later". I did not press this last part since, as a Phoenix business lawyer, I see a lot of folks claim to be "in the process" of a lot of things. Instead, I focused on the job they had asked me to do and let them know that I would be there to assist further if they needed guidance or further representation. Sure enough, several months later, these same clients later asked me to evaluate some stock purchase documents drafted by the seller's…
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What Happens to Business Bank Accounts in a Stock Purchase?

What Happens to Business Bank Accounts in a Stock Purchase?

Business Sale, Sale of Business, Stock Purchase
Note:  This post is an update to one of our blog's more popular posts of the past few years, in what we called the "M&Ailbag". Question:   I'm thinking about purchasing all of the stock of a small business and the bank account that was opened by the company's previous CEO (who is leaving).  Would the seller need to close that account and I open a new one?  I am thinking that I just get added to the existing account as a signor and, when the amendments are returned from the corporation commission, they would be taken to the bank to have the exiting signor removed?  The two (main) ways to buy an existing business Before answering this question, it is helpful to understand the two primary ways you can buy…
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Who Pays The Professional Fees in Sale of an Arizona Business?

Who Pays The Professional Fees in Sale of an Arizona Business?

Business Sale, Contracts, Sale of Business
As a Phoenix corporate and business lawyer, every so often I'm asked by clients new to the process of buying a business or selling a business which side will pay for the professional fees for the attorney, accountant, appraiser, and other services that are often essential to the transaction. The Attorney response every client hates These clients are usually disappointed when I give them that most lawyerly of all answers:  "It depends."  This is because there is no set rule or law that requires one party to a business sale or merger or the other to pay for the lawyer or accounting fees.  As with the terms of most private, business-to-business agreements, things are pretty free form and up to the contracting parties themselves to decide. However, in my experience…
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