Buying a Business in Florida

We review articles of incorporation or organization, operating agreements or bylaws, board resolutions, ownership records, and capitalization tables. This confirms the seller has legal authority to sell and that ownership is clean - no competing claims, missing approvals, or prior transfer disputes.

We review audited or reviewed financial statements, federal and state tax returns, and bank statements for 3-5 years. The goal is to verify the revenue the seller is representing, normalize earnings for one-time events, confirm tax compliance, and identify any off-balance-sheet liabilities.

Every material contract is reviewed for assignability. Customer agreements, vendor contracts, leases, licensing arrangements, and loan documents may contain assignment restrictions or change-of-control clauses that require seller consent to transfer. A contract that cannot be assigned without consent is a risk - it could terminate at closing or require negotiation with a third party.

We review employment agreements, offer letters, bonus structures, non-compete obligations, benefit plans, and pending employment claims. Key employees are often the most valuable part of a small business. Understanding who they are, what they are paid, and whether they are staying is critical to the deal.

We verify ownership and registration of all trademarks, patents, copyrights, and trade secrets. We also review IP assignment agreements to confirm that IP created by employees and contractors was properly assigned to the company - not retained by the individuals who created it. IP that is not owned by the entity is not included in the sale.

We review all real property leases and confirm landlord consent requirements. Many commercial leases require landlord consent for assignment and contain change-of-control clauses that allow the landlord to terminate or modify rent terms on a sale. Discovering this after signing a purchase agreement can derail or delay closing.

We review all pending and threatened litigation, arbitration, regulatory proceedings, and unresolved disputes. In a stock purchase, all existing litigation transfers with the entity. In an asset purchase, indemnification provisions determine who bears pre-closing claims. Significant litigation is always a pricing and deal-structure issue.

For businesses with real property or operations involving chemicals, manufacturing, or regulated materials, we review environmental compliance history, permits, and any known contamination. Environmental liability follows the land - buyers need to understand what they are acquiring before closing.

We review all insurance policies - general liability, professional liability, workers compensation, property, and specialty coverage. This identifies coverage gaps and ensures that claims-made policies are handled correctly at closing to preserve coverage for pre-closing events.

We analyze revenue concentration - how dependent is the business on its top 3-5 customers? If one customer represents 40% of revenue, what happens if they leave? Vendor concentration creates similar supply chain risk. High concentration is a deal-pricing issue and often reflected in earn-out provisions or purchase price adjustments.