Acquiring a business through a stock purchase offers tremendous opportunity for profit as well as exposure to genuine risk. The Watkins Firm mergers and acquisitions attorneys have decades of experience helping San Diego entrepreneurs and business owners with Stock Purchase Agreements. We support our clients through every critical step of the process from negotiations through due diligence, contract creation and review, escrow, and transition following the completion of the sale. A well-strategized stock purchase allows you to “step into the shoes of the owner” assuming all assets, debts, profits and liabilities of the business or corporation you acquire.
What is the biggest risk associated with acquiring a business through a stock purchase in San Diego? In a word: liability. Unlike an asset purchase, where the buyer acquires specific assets, the greatest risk in a stock purchase lies in contingent liabilities that may be unknown or not fully developed prior to the closing of the transaction. While this may not represent a failure to disclose on the part of the seller, it is a genuine risk assumed by the buyer. There may be an unknown defect in one of the target products or corporate processes. An existing customer issue may escalate to an expensive and resource consuming lawsuit down the road.
If you are considering acquiring a business through a stock purchase we invite you to contact the experienced stock purchase attorneys at the Watkins Firm for a free consultation at 858-535-1511. You will learn about the steps required to complete the stock acquisition including (but not limited to):
- Identification of all assets, customers, intellectual property, existing contracts and potential new business contracts in process
- Disclosure and associated encumbrances for all loans, debts, liabilities and contingent liabilities
- Access to and inspection of corporate books and corporate records
- Negotiation, creation, review, modification and approval of the Stock Purchase Agreement
- Terms including purchase price, disbursement of funds, responsibilities of seller to ensure transfer of Goodwill
- Hold-back for unforeseen liabilities