Business-Minded Counsel to Assist in Buying or Selling a Business

Buying or selling a small business involves significant money, personal risk, and contracts you may only see once in a lifetime. Your lawyer has to make that process understandable, well‑structured, and legally sound so you can move forward with confidence.

Our services focus on representing small‑business owners and buyers in business sales and acquisitions, including asset purchases, equity sales, partner buyouts, and seller‑financed deals. Engagements typically cover deal structure, letters of intent, due diligence, drafting and negotiating the purchase agreement and related documents, and guiding the transaction through closing (and beyond).

Whether your deal is an asset purchase or equity sale, I work closely with you and your advisors to plan the transaction, coordinate due diligence, draft and negotiate the purchase agreement and related documents, and manage post‑closing obligations. My practice is built around owner‑operated businesses — so the advice, documents, and timelines are tailored to the realities of main‑street and lower‑middle‑market transactions rather than large‑cap M&A deals.

What you can expect in a business transaction. 

Selling or buying a small business is more than signing a contract – it's a series of decisions, documents, and deadlines that need to line up cleanly. The process is structured so you always know what comes next and what is needed from you at each stage.

1. Initial review and strategy
   The engagement begins with a focused consultation to understand your goals, the business, and any existing offers or broker involvement. Key documents (entity records, financials, major contracts, leases, and any prior LOIs) are reviewed to frame an appropriate deal structure and timeline.

2. Deal structure and letter of intent
   The economic and legal terms of the transaction—purchase price, structure (asset vs. equity), working capital, seller financing or earn‑outs, and key conditions—are then refined. The letter of intent is drafted, reviewed, or negotiated so it accurately captures the agreement and protects your bargaining position. At this stage, we'll also start discussing what will be involved in the due diligence process. For sellers that may involve the proactive collection of key documents and information. 

3. Due diligence and definitive agreements
   With an agreed LOI, attention turns to legal due diligence, focusing on contracts, licenses, employees and contractors, intellectual property, liens, and regulatory issues. If you are a seller, we will determine what information and documents will be shared during due diligence - and how. That can be done via email, or we can create an easy-to-use data room to facilitate the exchange of documents. For buyers, we will finalize a comprehensive due diligence list and work to review relevant documents and information to ensure you know what you are buying. In parallel, the purchase agreement and related documents (bills of sale, assignments, consents, and closing deliverables) are prepared and negotiated to fit the specifics of your transaction.

4. Closing and post‑closing transition
   At closing, all signatures, funds flow, and closing conditions are coordinated to bring the deal over the finish line. After closing, support remains available for transition issues, post‑closing covenants, and disputes so you can focus on running – or exiting – the business. 

Frequently Asked Questions 

Do I need a lawyer if I'm already working with a business broker in Virginia?
A broker can help find a buyer or seller and facilitate negotiations, but they cannot provide legal advice or draft customized transaction documents. A lawyer focuses on deal structure, risk allocation, and contract language so the agreement reflects what you actually intend and protects you if something goes wrong.

When is the right time to involve a lawyer in a business sale or purchase?
The best time is before signing a letter of intent or informal offer. Early input on structure, key terms, and due diligence requests can prevent problems that are hard or expensive to fix later. It does not have to be an expensive proposition. If an LOI is already signed, legal advice is still valuable during due diligence and negotiation of the purchase agreement. Bad purchase agreements can end up costing you far more than you would have spent on practical, proactive legal support during the transaction.

How are the legal fees for a business sale or purchase usually handled?
Fee arrangements depend on the size and complexity of the transaction, but it is common for legal fees to vary between 1% to 4% of the deal value (depending on a number of factors). Many small‑business deals are handled on a flat fee basis, with partial payments tied to specific milestones during the transaction. For example, many of our engagements follow this general structure:

• Small percentage of the total flat fee due upon execution of the Letter of Intent
• Larger percentage of the flat fee due upon delivery of either (i) the initial draft of the definitive agreement (if we are drafting the contract) or (ii) the initial redlines of the definitive agreement (if the other party is drafting). 
• Larger percentage of the flat fee due when the definitive agreement and ancillary documents are "final" from a legal standpoint and are ready to be executed.
• The remainder of the flat fee due upon closing. This may be simultaneous with the completion of the "final" documents, or it may be a non-simultaneous signing and closing situation. There will be an equitable adjustment of the flat fee based on the amount of work performed if the deal does not close. 

The engagement letter will outline the structure, so costs are clear before work begins and there are no surprises.

How long does a typical small‑business sale take from start to finish?
Timelines vary, but many small‑business transactions take 30-90 days from a signed letter of intent to closing. Complexity of the business, lender involvement, third‑party consents, and the responsiveness of both sides can all speed up or slow down the process.

What kinds of due diligence should a buyer expect to perform?
Buyers typically review financial statements, tax returns, key customer and vendor contracts, leases, employment and contractor arrangements, intellectual property, licenses, and any liens or pending disputes. The scope is tailored to the size of the deal and nature of the business, but the goal is to confirm what is being purchased and identify risks before closing.

Can you help with seller financing, earn‑outs, and other creative deal structures?
Yes. Many small‑business transactions include seller notes, installment payments, or performance‑based earn‑outs. Carefully drafted promissory notes, security agreements, and purchase‑price adjustment provisions are critical to making these structures workable and enforceable for both sides.

You can find additional information about selling or buying a business and how I can help on these pages:

• Sell a Business — Guidance for owners preparing for a successful exit

• Buy a Business — Strategic counsel for entrepreneurs and investors acquiring companies

Get the legal advice and counsel you need when buying or selling a business. Contact Eldredge Law Group, PLLC for a consultation.