Legal Question in Business Law in New Jersey

Re: selling small business

I also agree with the other writers as to the basic documents you should have, until some final agreement is reached. You do not need a broker to assist you. Are there competitors that might be interested in either opening another location, or acquiring your students? They may be willing to pay a bonus to eliminate competition. Having represented many small businesses over the years, buying and selling, I can assist you, if needed.

Re: selling small business

Hire an experienced business attorney BEFORE you do anything. Don't try to "wing it!"

Ron Cappuccio

www.taxesq.com

Re: selling small business

At the very least, you should have the teacher execute a comprehensive non-disclosure agreement. A deposit is not typical, but if she'll agree to it, it certainly doesn't hurt.

I would also recommend putting together a letter of intent (or LOI) which lays out the basic framework of your agreement, and also talks about what happens if the deal does not go through. There are also other elements you should include.

I'm happy to chat with you about the process further.

Re: selling small business

An NDA is the minimum that you need. It is a better practice for her to sign a contract for purchase of the business subject to verification of the representations that you make during a period of "due diligence". The contract would contain an NDA plus many other terms leading to actual settlement. For example, if you agree that she is only interested in the business if the gross revenues exceed a certain amount and the number of students signed up for next year are a certain amount, you represent those facts as being true (if they are) and she has the due diligence period to satisfy herself that they are. It gets more complicated but that is the concept. Your best analogy is the sale of a house subject to passing a termite inspection.

A realtor's primary function is connecting a real property seller with a buyer. That is not the issue here. You don't need a realtor even if real property is part of the deal, but you should have a lawyer draw the contract. My firm handles matters of this type, however it may be easier for you to work with a lawyer whose office is closer to you. If I can be of further help to you, call or email.

See also: http://info.corbettlaw.net/lawguru.htm

Re: selling small business

I have read what the other lawyers wrote, and they are correct. I would suggest you meet with an attorney who does this kind of work (purchase and sale of businesses) and is located not too far from you.

To keep the cost down, and to make sure that the teacher is serious about the purchase on terms that you can accept, you will want a letter of intent, a very shortened agreement setting out the basics of the deal. A full contract is much longer and more expensive; make sure you and the teacher agree on the basics before you incur that expense.

I do this kind of work. If you would like, give me a call; I am in Hackensack (northern New Jersey). I will be happy to discuss

this with you; a brief telephone consultation will be free.

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