15 Questions About Buying a Business

Asset purchases let you select specific assets and exclude liabilities. Stock purchases transfer the entire entity. The choice affects taxes, liability exposure, and contract continuity. See Asset vs. Stock Purchase for details.

Common methods include income capitalization, discounted cash flow, comparable transactions, and asset-based valuation. The right method depends on the business type and transaction context. See How Is a Business Valued?

Legal, financial, operational, and regulatory diligence across contracts, litigation, compliance, employment, IP, and financials. See our Due Diligence Guide.

Simple transactions close in 60 to 90 days. Complex deals with regulatory approvals or extensive due diligence may take 6 to 12 months. Our Strategic Guide covers the 8-phase timeline.

An LOI establishes the negotiation framework including price, due diligence period, exclusivity, and key terms. Most provisions are non-binding except confidentiality and exclusivity.

The seller's factual assertions about the business. They provide information and establish a contractual basis for post-closing claims if proven false. Clark Meyers PC drafts comprehensive schedules covering all material areas.

An earnout ties a portion of the purchase price to the business's post-closing performance. This bridges valuation gaps but creates complexity in how performance is measured and payments are calculated.

Escrow holdbacks provide accessible funds for indemnification claims. Typical escrows hold 10% to 15% of the purchase price for 12 to 24 months. The ABA Business Law Section recommends escrow in most transactions.

Employee transitions require careful handling of offer letters, benefit continuation, non-compete transfers, and regulatory compliance. See our Employment Agreements Guide.

Post-closing includes entity restructuring, contract assignments, regulatory filings, governance updates, and integration milestones. Our FGC program provides ongoing support through integration.