Washington DC Stock Purchase Agreement Attorneys
A Washington DC stock purchase agreement law firm you can trust is an invaluable resource for your business. At Antonoplos & Associates, we have provided legal services to small and large businesses for over twenty years. As such, our group of skilled attorneys have the knowledge and experience required to guide your business through legal issues associated with stock purchase agreements.
Why You Need A Stock Purchase Agreement Lawyer
Most business owners face business-related legal decisions on a daily basis. As the owner of a business, this should be no surprise and for many business-related legal issues, an attorney is not necessary. However, when polled, most business owners don’t have a trusted business attorney to represent their business when legal issues do occur. The reason many business owners stated that they didn’t already have a relationship with a business attorney was that they thought that a skilled business attorney would be too expensive for a small business. As such, most business owners only hire a business lawyer when serious legal issues come up.
At Antonoplos & Associates, we don’t think you need a business lawyer for every decision you make. However, consulting an experienced business attorney is an invaluable resource for your company for two reasons. First, a good business attorney will be able to offer guidance on many issues such as reviewing the terms of an office space or storefront lease, drafting contracts that will establish business partnerships, or review stock purchase agreements. Overall, incorporating a business attorney in general decision making ensures that your business will not enter into any potential disastrous agreements. Secondly, by discussing important parts of your business with a business attorney, this attorney will be better equipped to represent you in the event that litigation occurs. For these reasons, consulting and incorporating a business attorney into your business’s general decision making can even save your business money.
Below, you will find more information on how Antonoplos & Associate’s business law practice can help your business with stock purchase agreements.
What Is A Stock Purchase Agreement?
A stock purchase agreement is an agreement involving and finalizing all the terms and conditions related to the purchase and sale of the shares of a company. Through a stock purchase agreement, the buyer acquires not only the stock of the entire business but also the seller’s legal entity and the company’s assets and liabilities.
Sale through a stock purchase agreement also includes within it the sale and transfer of the seller’s physical assets. One benefit of this type of sale is that it does not require numerous separate conveyances of each individual asset because title of each asset lies within the corporation. In addition, proceeds of a stock sale are taxed at a lower capital gains rate, and in C-corporations, the corporate level taxes are bypassed, allowing the seller to avoid “double-taxation.” Therefore, sellers tend to favor stock sales, as they allow the seller to enjoy the lower tax rates and the ability to bypass responsibility for future liabilities by selling them off.
While buyers may accept more risk by purchasing the company’s stock, they are also buying all contingent risks that may be unknown or undisclosed at the time of sale. These unknown risks could include future lawsuits and employee issues. Furthermore, if the business has a large number of copyrights or patents, or if it has significant government or corporate contracts that are difficult to assign, a stock sale is the better option because the corporation, not the owner, retains ownership. Accordingly, the buyer can more easily obtain the valuable assets of a company through a stock sale without risk of losing such important or valuable contracts.
By definition, however, typically a sole proprietorship, partnership, or limited liability company cannot conduct a stock sale. However, the owners can sell their partnership or membership interests, possibly effectuating the same type of sale.
For more information on stock purchase agreements, please contact Antonoplos & Associates at 202-803-5676 or directly schedule a consultation with one of our attorneys. For general business law information, check out our blog.
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