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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