Buying or selling a business with a stock purchase in San Diego or Southern California requires a legal partner with extensive experience and legal skill.  The proven mergers and acquisition attorneys at the Watkins Firm will guide you through each step of the process.  Buying or selling a business or corporation isn’t as simple as a buy-sell contract or stock purchase agreement.  The acquisition or sale of a company is a complex process that must take into account many different perspectives, risks and benefits for each party.

3 Key Takeaways About Buying or Selling a Business with a Stock Purchase in San Diego:

• A stock purchase is a complex legal and financial transaction that requires extensive due diligence, strong contracts, and an experienced mergers and acquisitions attorney.
• Due diligence is the most important step in a successful stock purchase transaction.
• The stock purchase agreement is a critical document in any merger or acquisition.  Look for experienced San Diego mergers and acquisitions attorneys with decades of experience.

Due Diligence is Crucial When Buying or Selling a Business Through a Stock Purchase in San Diego

Due diligence is crucial when buying or selling a business with a stock purchase in San Diego and Southern California.  Due diligence is required to ensure the buyer clearly understands what they are purchasing, and the seller has disclosed all issues that prevent misunderstandings and litigation down the road.

Due diligence is often mistaken as a simple site inspection and review of the books.  Nothing could or should be further from the truth.  The experienced business sale and acquisition team at the Watkins Firm has developed a comprehensive system and supporting checklists to carefully assess and verify every aspect of the transaction at hand.  We have helped to manage the process for virtually every size entity from a single local company to a national chain or multi-entity corporation.

The Stock Purchase Agreement

The stock purchase agreement is a critical document that must be carefully negotiated and crafted to protect the atmosphere of collaborative cooperation between the parties while discussing potentially difficult aspects of the transfer.  How will title to specific assets be transferred?  Will new investors or partners be brought into the company?  How will the buyer protect themselves from unforeseen contingent liabilities?  How do the agreements capture the warranties and representations of the seller and what happens if these come into question after the transaction?  How will the seller help to ensure continuation of Goodwill and preservation of the existing book of business?  What is the fastest way for the seller to receive compensation and move on to their next project?

Pro-tip: “Well, first of all, you’ve got to decide, you have to do your own due diligence. You got to look at the physical assets of the company you’re going to do business with as well as the financial assets, the market, the Goodwill and the tech. You got to look at everything, but there are two basic ways companies buy and sell each other one through a stock purchase and ones through an asset purchase. And also there’s this question of a joint venture and merger, but for the basic purchasing and sale of a company, it’s either going to be an asset sale or a stock sale.

A Stock purchase is when you buy stock in a company, for example, if you buy all the stock in a company where you want to keep the corporation going or keep the LLC going and maybe keep some key employees, maybe keep the, let’s say they have stock incentives going on. You have employees that have been there a long time. They have a vested interest in seeing that corporation go forward. So you might want to do a stock transaction that way.

If you have a stock purchase and it’s not a hundred percent, you’re going to want to have a shareholder’s agreement unless it’s a publicly traded corporation. Then of course, you’re just going in a whole different area. But for privately held transactions like small companies, you’re going to want a shareholder agreement. So when you buy it just like an operating agreement, you have your shares. You have, let’s say 70% of the shares in the company. You’ll have an agreement that outlines what powers you have as the majority and what powers you don’t and you’ll know ahead of time, whether you can do what you want with that company, for the money you’re putting in.

Well, we want to have all of the agreements that are applicable that will help the company survive and, and do better. And the way we do that is we have lawyers have been here with, with us for 30 years or more. And we have a transaction formed bank of all of the transactional documents we’ve prepared over the years. And in that 30 or 40 years of transactional documents, our lawyers have probably come across the same type of agreement and the same type of deal you are proposing. We’ll go back and we’ll find maybe four or five of these similar agreements. And we’ll also compare that to our paid litigation research bank. And we’ll make sure it’s current in the law and we’ll run it by you. And then we’ll also be able to tell you as older lawyers that this is what other clients have done and it worked for them. So in addition to just writing up the agreement, as you ask, we can also give practical advice of this is what people did and it didn’t work. And this is what people did and it did work and they’re still around today.” – Dan Watkins, Founding Partner

An Experienced Partner in a Stock Purchase

There are many sound reasons for seeking experienced support when buying or selling a business through a stock purchase in San Diego or Southern California.   The Watkins Firm has served San Diego area businesses and entrepreneurs for almost four decades.  We have extensive experience supporting clients through the acquisition of a competitor, mergers, asset purchases or stock purchase agreements.  We can provide counsel at each step of the transaction, and help you to avoid mistakes and pitfalls that have come back to challenge others in the past and ensure a smooth transaction.

The process of buying or selling a business with a stock purchase in San Diego or anywhere in California is an excellent strategy to enter the market or expand existing businesses. We invite you to review our podcast Episode 13 – Mergers and Acquisitions as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.

 

Meet Dan Watkins:

Daniel W. Watkins is a true people person who sincerely listens. He cares about things that occur in other people’s lives. Dan enjoys digging into the facts and finding creative solutions to problems. He is not shy about giving his opinion either.

Dan’s interest in people make him deeply invested in every relationship and his exuberant personality makes him a true litigator. Dan fights for his clients with a fierce and calculated commitment.

Dan has practiced in the areas of business, medical practices and healthcare business, high tech/science, real estate and employment defense law since 1987. He is a seasoned litigator and true trial attorney with over 50 jury and bench trials to his credit. Dan has successfully represented both large companies and individuals and achieved substantial victories in well-publicized trials throughout California and the U.S.

He is experienced in business and corporate formation and administration, as well as all forms of alternative dispute resolution, including binding arbitration and mediation.

THE ROAD TO BECOMING A BUSINESS LAWYER AND LITIGATOR

Dan has almost 40 years of experience working with, for and against some of the largest insurance companies in the country. He has successfully tried and litigated cases in the areas of Healthcare Compliance, Commercial Litigation, Unfair Business Practices, Fraud, Breach of Contract, Battery, Premises Liability, Product Defect, Medical Malpractice, Discrimination, Sexual Harassment, Construction Defect, as well as Unfair Competition, Defamation, and Trade Secrets.

In December 2003, Dan commenced litigation against Health South Surgery Centers-West, Inc and its’ subsidiaries, exposing the company’s extensive mismanagement and misconduct of its’ surgery centers. Dan has also been asked by some of California’s largest municipalities and corporations to conduct legally required investigations into matters involving alleged employment discrimination and harassment.