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Business Sales and Acquisitions
Buying or selling a business in New York involves far more than agreeing on a price. The transaction structure, due diligence process, representations and warranties, and post-closing obligations all carry significant legal and financial consequences. A poorly drafted purchase agreement or an overlooked liability can cost buyers and sellers far more than attorney fees.
Parandian Law represents buyers, sellers, and closely held businesses throughout Westchester County and the greater New York area in asset purchases, stock sales, and merger transactions. We structure deals that protect our clients from hidden liabilities, tax exposure, and post-closing disputes, and we negotiate terms that reflect the actual value being exchanged.
New York business acquisitions require careful attention to structure. The choice between an asset purchase and a stock sale affects taxes, liability exposure, contract transferability, and regulatory compliance. We advise clients on the right structure before drafting begins, not after.
Asset Purchase Agreement · Stock Purchase Agreement · Due Diligence · Letter of Intent · Business Acquisition · Business Sale · Mergers and Acquisitions · Westchester Business Attorney · New York M&A
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New York business transaction framework
Business sales and acquisitions, the essentials
New York business sales typically proceed as either asset purchases or stock purchases, and the choice of structure has lasting consequences for both parties. Asset purchases allow buyers to select specific assets and leave unwanted liabilities behind. Stock purchases transfer the entire legal entity, including its contracts, licenses, employees, and contingent liabilities. Sellers often prefer stock sales for tax reasons. Buyers often prefer asset deals for liability protection. Negotiating the right structure is one of the first and most consequential decisions in any transaction.
Due diligence is the process by which a buyer investigates the target business before committing. This includes reviewing financial statements, contracts, leases, intellectual property, employment records, pending litigation, tax filings, and regulatory compliance history. In New York, bulk sale notice requirements under the Tax Law may apply to certain asset transfers. Skipping or shortcutting due diligence is among the most common and costly mistakes buyers make. Non-compete agreements are frequently included in business sales and are treated differently from employment non-competes under New York law, with courts applying a more permissive standard when the restriction is part of the sale of a business.
Key FACTS
Primary structures:
Asset purchase or stock sale
Letter of intent:
Non-binding but anchors deal terms
Due diligence period
Typically 30 to 60 days
NY bulk sale notice:
Required for certain asset transfers
Non-competes in business sales:
More permissive standard than employment
Representations and warranties:
Survive closing, typically 12 to 24 months
Earnouts
Common in owner-operated business sales
Escrow holdbacks:
Standard protection for post-closing claims
What we handle
Business acquisition and sale services
Transaction representation for New York buyers and sellers at every stage of the deal.
Asset and stock purchase agreements
Drafting and negotiation of comprehensive purchase agreements covering price, payment terms, representations and warranties, indemnification obligations, conditions to closing, and post-closing covenants. Each agreement is tailored to the specific transaction rather than adapted from a generic template.
Due diligence review
Legal due diligence on target businesses, including review of corporate records, material contracts, employment agreements, intellectual property ownership, real property leases, pending or threatened litigation, and regulatory compliance. We identify deal risks before they become post-closing disputes.
Letters of intent and term sheets
Drafting and review of letters of intent that establish the key commercial terms of a transaction while preserving appropriate flexibility. A well-constructed letter of intent prevents misunderstandings and anchors the negotiation before the parties invest heavily in documentation.
Closing and post-closing matters
Coordination of closing logistics including preparation and execution of transfer documents, bill of sale, assignment agreements, officer certificates, and closing statements. We also advise on post-closing obligations, escrow releases, and earnout calculations.
How it works
Our business acquisition process
01
Transaction assessment
We begin by understanding the deal structure the parties are contemplating, the nature of the business being transferred, and the specific risks and priorities of our client. We identify the appropriate transaction structure, flag threshold due diligence issues, and advise on the implications of key deal terms before drafting begins.
02
Letter of intent and term negotiation
We assist in negotiating the letter of intent or term sheet, which establishes price, structure, exclusivity, timing, and the allocation of key risks between buyer and seller. Getting these terms right early prevents protracted disputes during the documentation phase.
03
Due diligence and agreement drafting
We conduct or coordinate legal due diligence while simultaneously drafting or reviewing the purchase agreement and ancillary documents. We surface issues discovered during diligence and negotiate adjustments to price, escrow, indemnification caps, or representations as warranted.
04
Closing and post-closing compliance
We manage the closing process, ensure all conditions are satisfied, and oversee the execution and delivery of closing documents. After closing, we advise on surviving obligations, escrow release timelines, and any disputes arising under the purchase agreement.
Common questions
Business sales and acquisitions
What is the difference between an asset purchase and a stock purchase?
n an asset purchase, the buyer acquires specific assets of the business, such as equipment, inventory, customer contracts, and goodwill, while leaving unwanted liabilities with the seller. In a stock purchase, the buyer acquires the seller’s ownership interest in the legal entity itself, taking on all of its assets and liabilities. Asset purchases are more common for smaller transactions and offer buyers stronger liability protection. Stock purchases can be more tax-efficient for sellers and simpler when the business holds licenses or contracts that are difficult to assign. The right structure depends on the specific business, the tax positions of the parties, and the nature of the liabilities involved.
What should I expect during due diligence?
Due diligence typically runs 30 to 60 days after the letter of intent is signed. A buyer’s counsel will request a comprehensive set of documents covering corporate formation records, financial statements, tax returns, material contracts, employment agreements, intellectual property registrations, real property leases, insurance policies, regulatory filings, and any pending or threatened claims. The goal is to identify undisclosed liabilities, verify the accuracy of the seller’s representations, and surface any facts that should affect the purchase price or deal terms. Issues uncovered during diligence often lead to price adjustments, additional escrow, or expanded indemnification obligations.
How long do representations and warranties survive after closing?
Most purchase agreements in New York provide that general representations and warranties survive for 12 to 24 months following the closing date. Fundamental representations, such as those covering title to equity, authorization, and capitalization, typically survive for longer periods or indefinitely. Tax and environmental representations often carry extended survival periods. Indemnification obligations are usually subject to a basket below which claims cannot be brought and a cap limiting total exposure. Negotiating these thresholds is one of the more consequential parts of the purchase agreement.
Do I need a non-compete agreement when selling my business?
Non-compete agreements are common and generally expected in business sale transactions. New York courts apply a more permissive enforceability standard to non-competes included in a business sale than to those in an employment context. A buyer is paying for goodwill and customer relationships, and courts recognize the seller’s commitment not to immediately compete as part of what is being purchased. The scope, duration, and geographic reach of the restriction must still be reasonable in relation to the business being sold. We draft non-competes in the business sale context to be enforceable and proportionate to the actual transaction.
Related services
Often considered alongside Business Formation
Need a business acquisition reviewed or structured?
New York business transactions carry significant legal and tax consequences. Speak with an attorney before signing a letter of intent or committing to a deal structure.
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