What is the process of buying a business in Illinois?

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What is the process of buying a business in Illinois?

On Behalf of | Jan 24, 2015 | Closely Held Businesses

Starting a new business can be exciting for many people, but daunting for others. Those interested in owning a business, such as in the construction industry, may prefer instead to buy an existing business. This way, they inherit the company’s name, reputation, workforce and equipment.

When you come upon a business for sale, the first thing you will want to figure out is why the owner is willing to sell. He or she may be looking to retire, and the business is in good shape. Or the business may be failing for various reasons, which could make it a poor candidate for acquisition.

If the buyer and seller agree to a transaction, they enter into a written contract. A good contract will contain details about what each party agrees to do, and when. For example, it will state that the current owner must sell the business to the buyer on a specific date, in exchange for a specific price.

Technically, a written contract is not legally necessary, but it is a bad idea in practice. If a dispute arises later, it would be your word against the seller’s, and difficult for the court to determine the terms of the agreement.

Before the deal closes, the buyer may need to conduct due diligence on the business. For example, he or she may need to investigate the financial condition of the business. If he or she discovers a “material change” in the business between the date the contract was signed and the closing date, he or she may have the right to cancel the sale, if the contract provides that right.

There is more to buying a business, of course. A business law attorney can provide more details.

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