Buying and Selling a Business in Tulsa, OK

Buying or selling a small business is exciting but can be complex and feel overwhelming. You are eager to close the deal, but there are many considerations and you do not want to overlook anything. At Davis Business Law, our Tulsa transaction attorneys can help guide you through the process of your unique business transaction and help you make it a successful one.

Types of Transactions

Each transaction is different.  But, the purchase or sale of a business typically falls into one of the following three categories: 1) asset purchase; 2) stock purchase; or 3) a merger. Each type of transaction has different considerations. 

Asset Purchase

An asset purchase occurs when the purchaser buys another company’s assets, without buying the company itself. This is an easier way to conduct the transaction and also helps the purchasing company avoid assuming the selling company’s existing liabilities.

For these reasons, an asset purchase is typically a preferable way to structure a business sale. The buyer can pick and choose what assets to buy. Common assets include inventory, vehicles, equipment, real property, accounts receivable, existing contracts, customer lists, and even trademarks and patents. With flexibility to decide what assets are purchased, both the buyer and the seller can often negotiate more easily. A buyer can also not buy any of the company’s liabilities, requiring the seller to explicitly assume responsibility for all existing liabilities.  An asset purchase agreement also gives the buyer flexibility to choose whether to hire any of the company’s existing employees.

Stock Purchase

A stock purchase occurs when a seller sells its shares of a company’s stock to a buyer. A stock purchase differs from an asset purchase in that in a stock purchase, the buyer steps into the shoes of the seller, becoming the new shareholder for the existing company and everything that comes with that company, such as inventory, equipment, and employees. Because the buyer also assumes all liabilities, buyers can be hesitant to do a stock purchase. But, some of the hesitancy can be helped with proper indemnification language. Davis Business Law’s Tulsa transaction attorneys can help protect you in such a circumstance. 

With a stock purchase, employees typically stay in place and remain employed by the same employer (the purchased company). Contracts and assets that belong to the existing company can also generally be transferred to the stock purchaser.

Using a stock purchase can result in a seamless change of ownership. By all appearances to the customer or the consumer, the business continues to operate without change, even though it is under new ownership and management. 

Merger

A merger is when two businesses join together to become one. It generally involves a merging of both companies and cultures. A merger generally involves a surviving company which assumes all the assets of the disappearing company. In exchange, the surviving corporation typically gives the shareholders of the merged company shares in the surviving company. 

Mergers can be useful tools to efficiently streamline two existing operations. Duplicative assets, if unnecessary, can be sold, streamlining the operation. 

Closing The Deal

The first thing a company should do when negotiating the purchase or sale of a business is to consult with a business attorney and accounting professional. The experienced Tulsa business attorneys with Davis Business Law have the experience to guide you through your transaction. 

The next formal step the parties should take after coming to a meeting of the minds on the deal is to prepare a letter of intent. This letter will address the broad aspects of the agreement, things upon which the parties agree in principle.  While a letter of intent is generally non-binding, it provides some measure of security that the parties are serious about completing the transaction and not going to nonchalantly back out.

After a letter of intent the parties should generally obtain non-disclosure agreements to protect themselves from improper disclosure of private information. The rest of the transaction requires the free flow of private business information which could give a competitor an advantage.

Next comes a formal agreement, conditioned upon a due diligence stage.  In due diligence, the selling business comes under scrutiny. The buyer should examine the purchased company’s assets, liabilities, employees, and accounting.

Finally, there is a closing, in which the company or its assets formally change possession, so long as certain conditions in the sale agreement are met. Even after the sale, agreements can also require the seller to provide aid and assistance during a transition period or the seller to warrant assets for a time. 

Protecting Your Interests

Each business transaction is different and has a unique set of challenges and potential pitfalls. The experienced Tulsa business attorneys at Davis Business Law have seen what problems arise, and they can help you prevent them. If you are thinking about buying or selling a company – congratulations! But please give us a call or contact us to help you protect that exciting new adventure. 

Contact Us

Call us at (918) 900-0192 or complete the form below. Your form will be directly emailed to us for a quick reply, typically within 1 business day often within hours the same day. All information is confidential.

Contact Form Tulsa

Meet Our Tulsa Business Lawyers

Daniel R. Wilson

Daniel R. Wilson

Joseph P. Titterington, Esq.

Joseph P. Titterington, Esq.

Ashley Morey, Esq.

Ashley Morey, Esq.

Contact Us

(918) 900-0192

office@davisbusinesslaw.com

Address

321 S. Boston, Suite 300

Tulsa, OK 74103

Davis Business Law

321 S. Boston, Suite 300

Tulsa, OK 74103

From Our Clients

Michael Lloyd
Michael Lloyd
17:43 29 Jul 22
I needed quick advice for contract review and business changes to which they were very responsive and available. Sound advice and knowledgeable. I’m... glad I found them.read more
RMike Wittkkop
RMike Wittkkop
00:14 29 Jul 22
Todd Bules
Todd Bules
19:45 24 May 22
Outstanding group. Matt and his team did a fantastic job taking care of our legal questions.
Regan Mckenzie
Regan Mckenzie
14:24 24 May 22
Hiring Davis Law was the best decision I ever made for my business.
Jeremy Cole
Jeremy Cole
23:42 08 Apr 22
Dylan Woods
Dylan Woods
02:37 08 Nov 21
Kristin wax the lawyer I dealt with in regard to getting an LLC and she was extremely thurough and went threw every detail in detail which is exactly... what I wanted. I would highly recommend if starting a business to use Davis and kristin in particular.read more
Tyler Ellis
Tyler Ellis
00:07 28 Dec 19
Matt was very professional and helpful when it came to our business problem. He had the issue resolved in just a couple of days. We will definitely... use him again.read more
Jeff Washburn
Jeff Washburn
02:24 03 Dec 19
If you are looking for a go getter and no bull type of people to work with, I highly recommend Matt and his team!
adria dunn
adria dunn
03:14 13 Oct 19
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