Change of Ownership

If you are buying or selling a business, adding or dissociating a partner, buying out a partner or changing from one type of business structure to another, we assist you with all the legal tasks associated with effecting the necessary change of business ownership.

It is common for a company to change ownership during its lifetime. A change of ownership typically occurs when owners leave, sell the company, buy out other owners, change the business structure or new owners join the company. Regardless of the reason for ownership change, the procedure to transfer the ownership depends mainly on whether the entire business is being transferred or only the names and percentage ownerships change.

“We provide the best legal advice to help your business succeed.”

The change of business ownership can occur in several ways, by either selling the company, or selling just a portion of the business, selling assets of the business, lease-purchase ownership interests among multiple owners, partner retirement, involvement of a new partner or family member transfer.

Company sale is the most popular mechanism of business ownership change and can be accomplished in two ways. The buyer can pay for the new company by using personal resources or by taking out a loan or the buyer can opt for an installment sale.

The transfer of ownership through sale of a business must be formalized in a written sale purchase agreement or buy sell agreement. The terms of the sale may be initially memorialized in a term sheet, memorandum of understanding or letter of intent, followed by a sale purchase agreement.

The sale purchase agreement may include the purchase price, compliance with corporate governance documents and terms requiring the buyer to comply with the company’s organizational documents. The sale of a company has complex financial, legal and tax implications, so we recommend consulting an experienced business attorney.

A company can also effect a change of ownership by adding new members, dissociating an existing owner or changing the percentage ownership of existing owners. The terms of a partial ownership transfer are governed by the company’s governing documents and any applicable state law and federal law. The governing documents of a company vary based on whether the company is structured as a limited liability company, a limited partnership or a corporation. However, these agreements provide the rules and terms for transferring partial ownership in a company. In the event that the governing documents contain no provision regarding the transfer of ownership, then only the law of the State of Florida applies and applicable federal law.

Another two popular mechanisms involved in a change of business ownership are lease-purchase and family member transfer. Regarding lease-purchase, the lessee runs the daily business operations for the lease period and at the end of the lease, the lessee can choose to buy the business for the set price or walk away and give the control back to the owner.

We successfully advise private companies, business owners and investors related to change of ownership transactions, including the purchase or sale of a company. Contact us or schedule a consultation with your business attorney in Miami, Florida, USA to help you complete a change of business ownership.

Malescu Law P.A. – Business & Corporate Lawyers

Change of Ownership

“We provide the best legal advice to help your business succeed.”

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