Buying a Business in Rhode Island
Buying a business can yield great profits in the future. However, individuals and companies looking to buy businesses should be aware of the complications of the transaction.
Buying a business sometimes involves laws concerning mergers, acquisitions, negotiations or securities exchanges. These fields are governed by Rhode Island and Federal law.
What Parts of the Business Am I Buying?
If a party wants to direct business operations, the best way is to acquire a right called "control". With control of a business, the party acquires all assets and the customer base of the business, plus it also assumed the company's debts. A complete picture of the financial position of the business is important for the buyer to make his decision. This picture is gained through a process called "due diligence". The process of due diligence uses Federal and Rhode Island guidelines to protect both parties. If these guidelines are not followed, a party may be found in breach of a legal duty. However, due diligence will lead to a better informed decision concerning whether you want to buy the business. Also, it will help the business to transition more smoothly to new ownership.
How Much Will the Business Cost?
Control of a business is sold for an amount that is necessary for a party to acquire an ownership stake. The value of the business property and the type of business factor in to determine the exact price. The process for how the right of control can be transferred or modified is defined by specific laws in Rhode Island. Procedures may make buying a business more or less expensive than simply the market value of its assets.
How Can a Providence Attorney Help?
Rhode Island poses unique demands that a party purchasing a business must meet. Attorneys practicing in Providence are knowledgeable in Rhode Island law, and can find the cheapest way for you to purchase control of a business.
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