Buying an existing LLC

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H7153

posts: 1

Dec 02, 2008 12:05 PM ET Quote Report Abuse

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Can anyone recommend the (post-diligence) process for buying and existing LLC? Thank you.

RetiredMember5

posts: 58

Dec 05, 2008 2:29 PM ET Quote Report Abuse

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A number of sites exist as to LLCs and potential due diligence checklists. You may want to reference our FREE entrepreneur guide to review legal structure and formation issues.

patentandtrademark

posts: 1332

Dec 06, 2008 9:22 AM ET Quote Report Abuse

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make sure to audit any intellectual property.

-------------------------

James Lindon, Ph.D. Patent Attorney
Lindon & Lindon, LLC
Cleveland, Ohio
Patents, Trademarks, Copyrights, Pharmacy Law, Litigation
[this is not legal advice - provided for discussion only]
Intellectual Property for the Individual and Small Business: Identify, Protect, Enforce, Defend.
"Fools rush in where angels fear to tread."
http://www.LindonLaw.com

WebJunky

posts: 549

Dec 08, 2008 12:14 AM ET Quote Report Abuse

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hire a CPA and make sure the financials are audited. if possible, work within the business for a limited time to witness the true performance. finally, make sure all state/fed documents are transfered appropriately. this involves the LLC itself, any DBAs etc.

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WebJunky

posts: 549

Jan 11, 2009 7:24 PM ET Quote Report Abuse

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forgot something very important but rarely included....include some indemnification clause in the agreement that 1) releases you from liabilities incurred by the business prior to you buying it and 2) has the owner reimbursing you for any working capital deficiencies from the time of your diligence

i have seen some clauses that mention if income isnt within X% threshold from when the initial diligence was conducted, then the purchase can be over turned. do whatever makes you most comfortable. if the seller is confident in the business results and really wants to sell you should hvae no issues.

good luck

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The Extra Money Blog
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infinique1

posts: 178

May 30, 2010 5:30 AM ET Quote Report Abuse

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If a company is doing well, they won't sell. If it's doing badly, there might be outstanding debts. There's top much due diligence and it's unadvisable to buy into a LLC unless you were there from the start.

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