Legal Question in Business Law in Texas

Re: Buying a Buisness

An indemnity agreement allows the indemnified party to received compensation from the other party to the indemnity agreement for damage, loss, or injury suffered.

When you purchase a business and the seller promises to indemnify you, the seller is merely promising to pay you back for any losses you suffer if you are sued because of something the seller did in connection with the business that you bought. The indemnity agreement alone will not fully protect you from "federal, personal property tax, unpaid debts”.

For example, if the purchased business is sued and found liable, you may sue to recover your damages from the seller of the business based on the indemnity agreement. But remember, the indemnity agreement will not keep you from being sued, found liable, or otherwise suffering a loss. The indemnity agreement will give you the right to attempt to recover you damages.

Re: Buying a Buisness

Not necessarily. Let's say the indemnity agreement states that Person A will pay your bills in the event of X, Y and Z. X, Y and Z happens, and you get billed. You then show the indemnity agreement. If Person A is not around, or bankrupt or just plain doesn't have it, you're stuck. If you're worried about liabilities, incorporate your business in lieu of a d/b/a.