Selling a business isn’t just a financial transaction—it’s a legal event with long-term consequences. For many business owners, the sale of their company is a once-in-a-lifetime event, often representing the peak of years of effort and sacrifice. But amid the excitement of receiving a strong purchase offer, many sellers make a costly mistake: they rely too heavily on templated documents or the buyer’s representations and skip hiring a qualified attorney to protect their interests.
At Ruesch Reeve Werrett & Jones, PLLC, we’ve represented sellers in a wide range of industries and transaction sizes. We know how easy it is to overlook critical legal and financial details during a business sale—and how devastating the consequences can be if you do. Below, we explain exactly why working with a skilled business attorney is one of the smartest decisions you can make when preparing to sell your company.
The Danger of Focusing Only on the Purchase Price
It’s natural to be drawn to the offer price, especially if it exceeds your expectations. But a high purchase price doesn’t mean much if you end up losing money to post-sale liabilities, tax penalties, or disputes with the buyer. Many problems emerge after the deal closes, often because the seller didn’t fully understand the contract they signed or failed to prepare properly.
It’s not uncommon for business owners to assume the buyer’s attorney has “everyone’s best interest at heart” or that a standardized contract is sufficient. Unfortunately, that assumption can cost you dearly. Every business is unique, and so is every sale. Without personalized legal representation, you’re risking not only your financial future but also your legal and reputational standing.
What a Business Attorney Does for the Seller
Here are the major roles an attorney plays in protecting a seller throughout the business sale process:
1. Tailoring the Transaction Structure to Your Best Interest
Business sales generally fall into two main categories:
- Asset Sales – The buyer purchases selected assets (equipment, inventory, customer lists, etc.) and sometimes assumes specific liabilities.
- Stock or Membership Interest Sales – The buyer acquires ownership of the legal entity, including all assets, liabilities, and legal risks.
Each structure has different implications for taxes, liabilities, and control over post-sale obligations. A business attorney helps you evaluate the pros and cons of each structure and negotiates terms that work in your favor, whether that means minimizing taxes or avoiding hidden debts.
2. Identifying and Mitigating Risk Exposure
When you sell your business, you’re not just handing over assets—you’re also opening yourself up to scrutiny. If the buyer later claims you failed to disclose something material (like pending litigation, uncollected receivables, or regulatory issues), you could face lawsuits, arbitration, or costly settlements.
An attorney ensures that:
- All relevant disclosures are made properly and timely manner.
- Representations and warranties are narrowly drafted to limit your liability.
- Indemnification clauses are balanced and don’t leave you on the hook indefinitely.
They also advise on “survival periods”—how long certain clauses remain in effect after closing—and help ensure you’re not assuming risks you didn’t bargain for.
3. Conducting and Preparing for Legal Due Diligence
Buyers conduct due diligence to learn everything they can about the business they’re purchasing. But sellers also need to prepare carefully for this process. Common seller-side issues include:
- Incomplete or disorganized corporate records
- Unclear ownership of intellectual property (IP)
- Missing contracts or improperly signed agreements
- Outdated business licenses or regulatory filings
A business attorney will help gather and review due diligence materials, correct legal deficiencies, and present the business in the best possible light, helping the deal move forward smoothly and minimizing the chances of last-minute breakdowns.
4. Reviewing and Negotiating the Purchase Agreement
One of the biggest mistakes business owners make is assuming a purchase agreement is just a formality. In reality, this document dictates what happens before, during, and after the sale. Key areas a lawyer will review or negotiate include:
- Purchase price allocation
- Earnouts and performance-based payments
- Escrow arrangements and holdbacks
- Closing conditions
- Termination rights
- Tax responsibilities
Each of these clauses can dramatically affect your payout, your ongoing obligations, and your exposure to future claims. An attorney ensures every term reflects your best interests, not just the buyer’s.
5. Addressing Employee and Contractor Transitions
Do your employees stay with the business after the sale? Are independent contractor agreements being transferred to the buyer? Are accrued vacation or benefit liabilities being passed on, or do you need to settle those obligations before closing?
Business sales often trigger employment law issues, especially if there are:
- Layoffs involved
- Unionized workers
- Non-compete or confidentiality agreements are in place
An attorney helps navigate these issues, ensuring compliance with state and federal labor laws and helping you exit gracefully without legal exposure.
6. Protecting Intellectual Property and Confidential Information
If your business includes trademarks, proprietary processes, trade secrets, or customer lists, you must ensure those assets are legally protected and correctly transferred. Likewise, you want to be sure that after the sale, you’re not improperly sharing sensitive information or giving the buyer access to more than they paid for.
Your attorney can help:
- Register or clarify IP ownership
- Draft or revise licensing agreements
- Enforce non-disclosure or confidentiality provisions
- Limit post-sale use of your name or branding (if applicable)
7. Tax Planning and Exit Strategy
One of the most overlooked parts of selling a business is tax planning. Selling your business could result in:
- Capital gains taxes
- Depreciation recapture
- State and local taxes
- Transfer taxes or sales/use taxes
An experienced attorney will coordinate with your CPA or tax advisor to minimize your tax burden, possibly restructuring the deal to defer taxes or take advantage of exclusions and deductions.
8. Managing Closing and Post-Sale Obligations
The transaction doesn’t end the day you sign the paperwork. Post-closing obligations can include:
- Delivering final financials or updated inventories
- Returning or destroying confidential documents
- Responding to buyer questions during a transition period
- Enforcing or complying with non-solicit or non-compete terms
If these obligations aren’t clearly defined and realistically limited, you could find yourself tied to the business long after you intended to walk away.
An attorney ensures that you:
- Fully understand your post-sale responsibilities
- They are paid on time and in full
- Have clear legal recourse if the buyer breaches any agreement
Real-World Example: The Risk of Skipping Legal Help
We once consulted with a business owner who sold a small manufacturing company using documents provided by the buyer’s broker. The price was fair, but the deal failed to address:
- $45,000 in uncollected accounts receivable
- Pending product liability claims
- Who would pay for the leftover inventory damaged during shipping
After closing, the seller received demands from the buyer to cover losses and legal fees. Because no attorney reviewed the agreement beforehand, the seller had limited options and ended up settling out of court.
Had they retained legal counsel at the start, these risks could have been identified and negotiated, protecting their proceeds and their peace of mind.
Why Choose Ruesch Reeve Werrett & Jones, PLLC
At Ruesch Reeve Werrett & Jones, PLLC, we understand how personal and important selling a business can be. We provide:
✅ Strategic advice on deal structure and timing
✅ Thorough contract review and negotiation
✅ Support through due diligence and closing
✅ Risk mitigation for taxes, liabilities, and future claims
✅ Tailored representation focused on your long-term protection
Whether you’re selling a family-run restaurant, a growing tech startup, or a professional services firm, our team has the knowledge and experience to guide you through every legal step of the process with clarity and confidence.
Final Thoughts: Get Legal Help With Selling a Business
The excitement of a strong offer shouldn’t override the importance of legal diligence. Selling your business is a complex event that impacts your finances, plans, and legal standing. Hiring a qualified business attorney is not an unnecessary expense—it’s a critical investment in protecting your years of hard work.
At Ruesch Reeve Werrett & Jones, PLLC, we help business owners throughout Utah close successful, stress-free sales. We invite you to reach out before you sign anything, so we can make sure your legacy is protected and your future is secure.
Contact Ruesch Reeve Werrett & Jones, PLLC Today
📞 (435) 635-7737
📍 Based in Hurricane, serving clients across Utah
🌐 https://rrlegal.com