So you've got your eye on buying a business. Or you’re ready to sell your own company to someone else. Whichever side you’re on, buyer and seller are both on board and ready to move forward with the sale. You’ve even drafted a Letter of Intent to demonstrate that you’re serious about the business purchase transaction.
An LOI is a great place to start the process of selling or buying a business. But it's far from the only document you'll need to finalize the sale.
You must make sure to cross your t’s and dot your i’s in a business sale. The process of transferring ownership will go much smoother if you cover all your bases.
But what documents do you need?
Your needs will change depending on your industry and the particulars of the business for sale. The best way to make sure you’ve addressed all your issues is to speak to a local Philadelphia business attorney who can help you with your unique transaction.
Business sales involve risks. It’s natural for both buyers and sellers to have hopes and apprehensions about a merger or sale. A business purchase negotiation requires trust between a buyer and seller as they work to come to an agreement.
A Letter of Intent (LOI) is a crucial part of a successful business sale. An LOI acts as an informal way to kick off a negotiation between a buyer and seller in a business purchase transaction.
Your Letter of Intent essentially “sets the stage” for your business purchase. The LOI terms will clarify the expectations of both sides going into the purchase. Whether you're the buyer or the seller in the sale, both parties benefit from drafting an LOI early on in the process.
Because an LOI is the first step in the business purchase process, you want to start on the right foot. That means you want to get an attorney involved to help draft the LOI for you.
Drafting a Letter of Intent on your own could lead to mistakes down the road. At Holmes Business Law, we often get clients who’ve already drafted Letters of Intent with unfavorable terms. These terms are harder to undo compared to getting them right the first time around.
Our experienced lawyers help companies with business sales every day. Call our Philadelphia area offices now at 215-482-0285 to get your business purchase transaction on the right track.
What’s a Letter of Intent When Selling or Buying a Business?Letters of Intent (sometimes called Memorandum of Understanding) are often non-binding under the law. But many courts will uphold or at least consider their terms in the case of a dispute – especially if there are no other legally binding documents. The parties may also choose to make the terms binding if they’d like.
Think of an LOI as an agreement to agree, setting out the path for your sale.
A Letter of Intent is a way to move the business purchase transaction forward. An LOI signals between buyer and seller that both parties are serious about negotiating a sale. Don’t let the informal nature of the agreement fool you – the terms you agree to now lay down the groundwork for the ultimate outcome of your business sale.
A Letter of Intent comes into play after:
At that point, the buyer will submit their business purchase Letter of Intent to the seller. Both sides should have legal counsel to help them negotiate the terms before signing.
If your Letter of Intent is non-binding, it can be overruled in a court of law by other executed contracts or documents that have greater legal authority.
What Needs to Be Included in a Letter of Intent?From a buyer’s point of view, a Letter of Intent expresses the terms under which you’re willing to buy the business. Think of it as the first volley in a negotiation.
A Letter of Intent should set out the following terms:
Contingencies lay out what the buyer expects to happen before they’re ready to close the purchase. That could mean obtaining a commercial lease, securing additional financing, or providing the buyer with the necessary tax documents to determine profitability.
An LOI may seem straightforward, but you should beware of some tricky parts. For example, some brokers may not want to return the buyer’s deposit if they decide to back out of the purchase for any reason that’s not based on the contingencies in the LOI. You must make sure that the proper wording is included in the deposit language in the letter.
If you’re looking to buy a business, you should have a lawyer draft the LOI for you. A lawyer can anticipate any potential issues and include terms for them in the language of the letter.
If you’re selling a business, you should have a business lawyer look over the terms of any Letters of Intent you receive from potential buyers. If you fail to consult an attorney, you may end up giving up certain rights in the letter, leading to losses down the road.
Negotiating Your Letter of IntentEven though the buyer starts by preparing the Letter of Intent, the seller must respond to protect their interests in their company. The business purchase negotiation process begins with the LOI.
Whether you’re on the drafting side or the responding side, you need a business lawyer to help negotiate the terms that could end up defining your business sale. It’s especially important to involve an attorney early in the process – ideally as early as possible.
When buyers write their own Letter of Intent without consulting a lawyer, they often include terms that hurt their bottom line without realizing it. And once the LOI has been sent to the seller, whatever terms are included become harder to change. So you want to talk to a lawyer before you send your LOI if possible.
In fact, the earlier you get a lawyer involved in the LOI drafting process, the better a deal we can negotiate for you. At Holmes Business Law, our experienced lawyers can draft or negotiate your LOI with all the terms you need to make a successful sale.
Call our Philadelphia offices today at 215-482-0285 to get started with our legal team.
If you’re in the business of selling products, Amazon's marketplace is an incredible platform that makes it possible for you to reach millions of potential buyers online. You can take advantage of Amazon’s consumer base and fast shipping for a small commission from each sale you make.
It's no surprise then that Amazon is so popular with third-party retailers and independent sellers. But the platform’s popularity also makes it a common target for counterfeiters and listing hijackers who pass off fake brand products as the real thing.
The Amazon Brand Registry was created to solve the problem of counterfeit listings. The ABR connects branded products to their authentic sellers, protecting both sellers (from lost sales to counterfeits) and consumers (from buying counterfeit goods). Sellers who join the Amazon Brand Registry get the benefit of brand protection on Amazon’s website.
The problem? You need a federally registered trademark to join the Amazon Brand Registry.
A federal trademark registration establishes the legal presumption that:
Holmes Business Law offers trademark registration services tailored to the needs of Amazon sellers. Call our offices now at 215-482-0285 to get started on the right track.
What Is the Amazon Brand Registry?The Amazon Brand Registry grants you exclusive tools to protect and promote your brand on the Amazon market. If you join with a valid trademark, you get:
Can You Sell on Amazon Without Brand Registry?Yes, but you would be hamstrung by a number of challenges. Without the protection and support of an Amazon Brand Registry account, you face an uphill battle to success.
Aside from the protection you get with a Brand Registry account, it’s also the only way to access Amazon’s advanced Seller Central features to upgrade your product listings.
If you're trying to build a long-term business or brand, a trademark is critical to establishing your value in the market. Most savvy consumers know that Amazon has problems with counterfeit and fake products. With Brand Registry, you get a presumption of trust. Potential customers can count on you as a legitimate business that’s invested in its products.
In addition, with a Brand Registry account, you can use Enhanced Brand Content to control how your listings look. Meanwhile, Amazon keeps updating the features available for Brand Registry sellers, with new improvements and tools coming out all the time.
With just a trademark, you get protection from product infringement and access to more of Amazon’s powerful selling tools. There are so many opportunistic competitors on Amazon’s platform that will try to piggyback on the success of a brand gaining popularity. With Brand Registry, you can protect yourself and your customers from copycats.
Trademark Registration for Amazon SellersOnly a valid trademark registered with the U.S. Patent and Trademark Office (USPTO) can get you into Amazon’s Brand Registry. Unregistered trademarks don’t count, no matter how long you've been using your logo or brand name to conduct business.
What’s the U.S. Trademark Registration Process?The USPTO trademark registration process can take 9 months or longer between filing your application and receiving your trademark registration certificate.
The formal trademark registration process has 4 steps:
Once you receive your trademark registration certificate at the end of the process, you can enroll in the Amazon Brand Registry. That involves:
When Should You File for a Trademark?The sooner the better. You can even file for a trademark before you start selling products on the market, with an “intent to use” application. If you’re selling products on the market now, you can and should file a trademark application as soon as possible.
What if you can’t wait 9 months? What if someone is already counterfeiting your goods now?
You can speed up the trademark registration process by filing a Petition to Make Special with the USPTO. With this petition, you could speed up the time it takes for an examining attorney to get to your application – from 3 months to 1 month or less.
If you fail to register your trademark and someone else registers it instead, you could lose your entire brand to Amazon counterfeiters. It’s a heartbreaking reality when it happens to business owners, and you can avoid it by getting a trademark sooner rather than later.
The lawyers at Holmes Business Law can help you position your Amazon business for success. Call our offices now at 215-482-0285 to get started.
You can also download our PDF resource for Amazon sellers: How to Pick the Right Trademark Class for Amazon Sellers (eBook)
In our latest video, learn the top three issues buyers encounter when buying an existing business. Is this an instance where you need to engage a pro? Find out in our video.
For a business looking to fill a specialized position in your company, you may have to look internationally for the right candidate. If you find the best employee for the job outside the United States, they must have the right immigration status to legally work for you.
Fortunately, you’ve got options. For decades, the H-1B visa has been popular with employers and employees alike because of its accessibility, broad requirements, and long duration.
The H-1B visa allows a U.S. company to sponsor a highly educated nonimmigrant worker for an initial period of up to 3 years. The H-1B visa offers advantages for both employers and employees. As an employer, you get access to a much wider pool of candidates – literally the best in the world. Meanwhile, the H-1B visa allows an employee’s family to come with them. Plus, they can pursue dual intent for legal permanent residency while they work for you.
Of course, the H-1B visa comes with drawbacks, too. For one, approvals are granted by random lottery and there’s a yearly limit – with few exceptions.
Whether you choose to pursue an H-1B visa compared to others like the E-2, J-1, O-1, or TN classification depends on what’s best for your business. A local business immigration lawyer can evaluate your situation to come up with a solution catered to your needs. Your lawyer can then help you execute the visa sponsorship and approval process.
At Holmes Business Law, we handle business immigration needs for Philadelphia area companies who’re looking to hire international talent. Call us now at 215-482-0285 to talk to a qualified Philadelphia business immigration lawyer about your best options moving forward.
Pros and Cons of H-1B Visas for Employers
What Are the Benefits of Hiring H-1B Workers?
One of the greatest benefits of the H-1B visa is how broadly it applies to workers. Other comparable visa classifications require the employee to invest thousands of dollars, have managerial experience, or hold a master's degree or higher to qualify.
On the other hand, the H-1B visa only requires that the candidate:
The bachelor’s degree requirement allows you as the employer to hire a broader field of candidates who might not necessarily have more specialized degrees. H-1B visas are often used by companies in the fields of medicine, technology, engineering, business, and law.
As the employer who’s creating the job position, you control the job description. In order for an H-1B employee to qualify for the position, you must write the job requirements in a way that meets both the bachelor’s degree and “specialized knowledge” conditions for H-1B visas.
In addition to its broad application, the H-1B visa offers an initial term of up to 3 years, which is generous compared to some other options. For example, the B-1 visa only grants 6 months and the J-1 as little as 1 year. That might work for short-term projects but not for longer employment contracts where you want your employee to grow with the company.
At the end of your employee’s first visa period, they can renew their H-1B for another 3 years, allowing for a total of 6 years. This extension may be used just once, with limited exceptions. After that, your employee will have to seek another type of visa. Some other visas may be extended indefinitely – your business immigration lawyer can help you decide which option is the best way forward for your company and the employee’s future.
Limitations & Disadvantages of H-1B Visas
The biggest drawback of the H-1B visa is its lottery system. H-1B visa candidates are picked at random, with a cap on the number of visas approved every year. Because the H-1B visa is so accessible and popular, the number of petitions far exceeds the cap every year.
In 2021, the H-1B visa limit is a total of 85,000. As an employer, you can avoid this limit only if you fall into a cap-exempt category. This usually covers government research organizations, institutions of higher education, and non-profit organizations.
As a result, despite all your best efforts – your chosen candidate may be denied their H-1B visa based purely on luck. If your petitioner isn’t selected, they’ll have to wait until the following year to reapply. There's no telling how long approval may take.
Because of the lottery process, H-1B visa applications also have strict deadlines. You must wait until April 1st to file your petition and you cannot begin work until after October 1st that year.
H-1B Visa Requirements, Sponsorship, and Approval ProcessWhen you hire an H-1B visa employee, you're not just investing in that worker’s future with your company. You’re also responsible for paying all the fees in the immigration petition process. That includes a $460 filing fee plus any additional program fees that can total anywhere between $500 to $4,000 based on the nature of your company.
The H-1B visa process proceeds in the following order:
Immigration issues can be complex, but a business immigration lawyer can help you get the best talent for your team without the hassle. Whenever you apply to sponsor an H-1B visa, you put in a large investment towards hiring that worker. You want to give yourself the best chance at approval from the beginning so that you don’t waste your time and resources. That means providing accurate and comprehensive information in your application and petition documents.
Call the Philadelphia offices of Holmes Business Law now at 215-482-0285 to get started on your H-1B petition the right way.
Another common question we get, "How Do I Hire Employees?"
First, if you are a business expanding and hiring employees, congratulations!
It's a huge step toward growth to hire your first employees.
Secondly, many people are very confused by the legal and tax issue surrounding a new hire. There are a variety of issues to consider, from payroll, to I-9 forms, non compete, wage and hour laws and basic HR considerations.
Each state has its own set of employment regulations, including wage and hour laws, overtime, sick time and discrimination laws. Plus, there are employment laws at the federal level you have to be aware of as well.
Check out this video to learn some basics about hiring employees.
If you need help getting the legal blocks in place to hire employees, give our Philadelphia or main line lawyers a call at: 215 482 0285
Covid-19 has affected business owners across the United States.
Many are unsure of how to cope, how to communicate with staff and how to keep everyone safe and healthy.
Being able to weather the current crisis requires some important skills and shifts in how one does business.
Grab a copy of our free ebook, How to Keep Your Business Healthy During a Crisis.
We hope this will help business owners emerge from the current crisis stronger than ever.
You've poured time, money, sweat, and love into building your company. Now, you’re ready to sell your business and reap the benefits of all your hard work.
The right business purchase transaction can sell your business at a profit while the wrong approach can leave you worse off than you’d hoped. Although your business is a professional venture, building something from the ground up makes for a personal and emotional undertaking. Most business owners feel some pride of ownership over what they’ve accomplished – and rightfully so, as building a successful business is anything but easy.
You must do your due diligence before you sign away your business rights to someone else. The last thing you want is to have your hard work stripped from you without proper credit or compensation. You want to make sure all the important issues have been considered and addressed before the ink dries on your business purchase agreement.
The best way to protect your interests in a Philadelphia-area business sale is to hire a local business lawyer to help with the process. Your attorney can help:
Preparing to Sell Your Business
The process of selling your business can be time-intensive, emotional, and filled with ups and downs. A business lawyer can help make the process go smoother from the beginning. Starting on the right foot can position you for the best success.
First, you should establish why you're selling your business. Any potential buyer will want to know and the answer will set the tone for your negotiations.
You can show documentation to prove:
It's never too early to start planning to sell your business if that's your ultimate goal. The sooner you get started, the better you can develop your business strategy, record-keeping practices, customer engagement, and management operations to that end.
Valuing Your Business for Sale
Business negotiations start and end with price. How much do you sell your business for?
A prospective buyer will approach you with a Letter of Intent (LOI) that includes their offered price. How you respond depends on how you value your business.
When it comes to appraising the value of your company, accuracy is key. Pricing too low can cheat you out of the profits you deserve while pricing too high can derail the deal.
Valuation involves looking at both the intrinsic aspects of your business and any relevant extrinsic factors out in the world. When valuing your company, you must consider:
Your lawyer will help assess your situation and make the best decision that matches your goals. While a business broker can help find a buyer for your business, your legal team makes sure your interests are represented in your business purchase agreement. That means drafting the terms of your agreement according to the outcome of your negotiations.
Other Considerations for Selling Your Business
Selling your hard-built business to someone else can be a challenge, not to mention an emotional experience. If you're closing your business and selling your assets, you may not care who buys them as long as the deal is quick and profitable. But if you care about the company continuing your vision, you may want to sell only to someone you trust. This is especially true if you expect to enter into a partnership or shareholder agreement under the terms of the sale.
You may have a buyer in mind already – maybe even an employee who’s ready to take over for you. When it comes to buyers outside your company or industry, you should investigate their background as much as they evaluate your business.
Ready to get started? Call Holmes Business Law today at 215-482-0285 to talk to a Philadelphia lawyer about your options for selling your business.
With many areas heading again into lockdowns and severe business restrictions, business owners are again scrambling to survive.
In this video, we present a few ways business owners can try to mitigate this latest round of business closures and restrictions.
If your business is looking for some help getting through the restrictions and needs some legal advice, feel free to reach out to our office at: 215 482 0285.
Sarah E. Holmes is a Philadelphia business attorney and strategist that helps start ups and established businesses looking to expand, protect their assets and increase their profits in an approachable, down-to-earth way. When you're looking for a business lawyer in Philadelphia, the Main Line or New Jersey, we can help.