Buying And Selling Your Business

Buying and Selling Your Business in Virginia and DC

At Fox & Moghul, our business law team specializes in handling business sales and purchases across a wide variety of industries, including retail, technology, real estate, food and beverage, and consulting sectors. Whether you’re a small business owner or a high-net-worth investor, our attorneys provide strategic legal counsel to ensure a successful transaction from start to finish.

With years of experience in business law in Virginia and Washington, DC, we understand the complexities that come with buying or selling a business. Proper due diligence and a sound legal strategy are crucial in minimizing financial risks and avoiding costly surprises. Our team has been recognized for their expertise, including our recent presentation at the Virginia CLE Seminar on the “Top 10 Common Mistakes in Small Business Sales and Purchases,” highlighting the importance of thorough planning and execution.

Key Considerations in Business Sales and Purchases:

1. Deal Structure: Asset vs. Stock Sales
   One of the primary decisions in any business transaction is whether to structure the deal as an asset sale or a stock sale. Each has its own set of tax implications and liability considerations. In an asset sale, buyers typically prefer this structure for tax benefits and to avoid potential liabilities, while sellers often prefer stock sales to avoid double taxation. At Fox & Moghul, we help clients understand these nuances to make informed decisions.
2. Letters of Intent (LOI) and Due Diligence
   Negotiating a Letter of Intent (LOI) is one of the critical early steps. It is essential to clarify whether the LOI is binding or non-binding, outline the purchase price, and identify any contingencies such as seller financing or earn-out provisions. Our attorneys ensure that clients are protected during the due diligence phase by conducting a thorough review of the business’s financials, contracts, intellectual property, and other key assets to mitigate risks.
3. Valuation Challenges
   One of the Top 10 Mistakes identified in our Virginia CLE presentation is inadequate business valuation. Small businesses often undervalue intangible assets, such as brand goodwill and intellectual property. Our team helps clients use advanced valuation models like the Discounted Cash Flow (DCF) method and EBITDA multiples to ensure they receive or pay a fair price. This detailed approach prevents overpayment and ensures that no hidden liabilities surface post-sale​(10 Common Mistakes in S…).
4. Seller Financing & Earn-Outs
   Structuring a deal with seller financing or earn-out provisions can be beneficial, but both present risks. In seller financing, the buyer pays part of the purchase price upfront and the remainder over time, often secured by the business itself. Earn-outs tie part of the purchase price to the business meeting future performance goals, such as achieving specific revenue or profit margins. Our legal team ensures these terms are clear, protecting both buyers and sellers.
5. Protecting Against Unknown Liabilities
   Indemnification clauses are critical in protecting the buyer from unknown liabilities post-transaction, especially in a stock sale where the buyer may inherit all of the company’s liabilities. Our firm ensures these clauses are drafted to cover all potential liabilities, providing peace of mind in your transaction.
6. Non-Compete & Non-Solicitation Agreements
   One of the most common ancillary agreements in business sales is the non-compete Buyers often require sellers to agree not to compete in the same market for a certain period. At Fox & Moghul, we ensure these agreements are tailored to be enforceable in Virginia and DC courts, protecting your investment.

Avoid the Top 10 Common Mistakes in Business Sales and Purchases

In our Virginia CLE Seminar, “Top 10 Common Mistakes in Small Business Sales and Purchases,” we discussed critical pitfalls that buyers and sellers often overlook, including:

• Not properly defining assets and liabilities in the sale agreement.
• Ignoring intellectual property rights during the transaction, which can cause significant financial and operational risks post-sale.
• Overlooking tax implications of the transaction, which can lead to unexpected tax burdens.

Our experience and knowledge of these issues help our clients navigate these transactions confidently and avoid costly errors​(10 Common Mistakes in S…).

Why Choose Fox & Moghul for Your Business Transaction?

• Proven Expertise: Our attorneys have handled high-stakes business sales and acquisitions across industries, from multi-million dollar buyouts to small business transactions.
• Comprehensive Legal Support: We manage every aspect of the transaction, from deal structure and valuation to due diligence and contract negotiation.
• Thought Leadership: Recognized by the legal community for our expertise, including speaking at the Virginia CLE Seminar on the top mistakes in business transactions, our team is committed to educating clients and peers alike.

Contact Us Today

For expert guidance on buying or selling a business in Virginia or DC, contact Fox & Moghul today. Call 703-652-5506 to schedule your consultation, or visit our website to learn more.