Editorial Reviews
Book Description
Professional's Guide to Purchase and Sale of a Business is structured as a guide to lawyers and accountants who are advising clients in business purchase and sale transactions. It is not intended to be a treatise on accounting, contracts, taxes, or litigation in regard to business purchases and sales. Rather, the material sets forth the information that the professional advisor must be aware of in order to give competent advice to his or her client.
Although introductory, Chapter 1 offers important guidelines about the manners in which investigations are made and the way small business purchases and sales are initiated. Chapter 2 and 3 are a basic review of bookkeeping procedures, financial statements, and the manner in which financial statements are prepared. These chapters do not constitute a text on accounting. Instead, they are an introductory guide for nonaccountants, particularly lawyers, into the construction and meaning of financial statements.
Chapter 4, 5, and 6 are designed to guide the lawyer through the due diligence phase of the purchase transaction. Chapter 4 is a review of the business entity and those problems that are encountered in the verification of the business structure. Chapter 5 examines financial statements and related due diligence procedures. New material on computer problems related to the year 2000 has been added, as well as a new section on environmental controls. Chapter 6 is the investigation on behalf of the seller, which, of necessity, is simpler than the buyer's investigation.
Chapter 7 is a review of those considerations that are peculiar to the purchase of a franchise business. This chapter is primarily a review of the requirements of the Federal Trade Commission rules regarding disclosures in franchise sale transactions.
Chapter 8 is an introduction to the problem that are found in business buyouts. This type of transaction is one where one of the owners of a business is acquiring the business from the others. In this type of transaction, the due diligence requirements are relatively minimal.
This edition includes a new Chapter 9 that reviews some of the problems that are encountered in an intra-family transaction. Family dynamics are considered, and there is a review of some of the estate planning techniques that are currently included in some of these transactions.
Chapter 10 is a survey of the principal tax problems and considerations in regard to the acquisition of the business. While it is not a text on these tax matters, this chapter illustrates the common tax problems and considerations that must be reviewed during a business acquisition. Chapter 11 deals with the tax consequences of the collection of the sales price and is slanted toward the seller. Installment sales and corporate reorganizations are discussed. Chapter 12 considers the tax consequences to both the buyer and the seller when full payment of the purchase price is not made. Bad debt losses and real estate foreclosures are two of the problems that are reviewed.
Chapter 13 is an introductory discussion of litigation in failed purchase and sale transactions. A brief review is made of the available remedies and alternatives to litigation.
Chapters 14 and 15 are illustrated agreement forms. These agreement forms are annotated with a discussion of the reasons and purposes for each of the clauses, as well as observations and cross-references to the other chapters. New forms have been added that cover computer problems related to the Y2K issue. The forms in Chapters 14 and 15, all of which are easily adaptable to a particular transaction, may also be used as checklists for determining whether the documentation of the transaction is being adequately covered.
From the Author
Professional's Guide to Purchase and Sale of a Business differs from typical reference books: It combines information, references, and source materials dealing with both the accounting and the legal matters of the purchase or sale of a business. It is a rare businessperson who has the accounting or legal background, or both, with which to take on the challenges of purchases and sales of small businesses. Almost invariably, the investor turns to his or her accountant or lawyer, or both, for advice and professional services with respect to the transaction. The roles of the professionals are related. The accountant's primary duties are to determine the value of the business and to verify the financial data presented by the seller. To do so, the accountant must be conversant with the legal contents of representations and warranties, contracts, misrepresentations, and breaches. Lawyers are asked to determine in what type of business entity the buyer should oper! ate, to review the purchase documents, and to protect the buyer's investment or to be sure the seller is adequately secured. The lawyer must be concerned with accounting matters because that basic information in regard to a business is found in the financial statement. A lawyer who is reluctant to deal with financial statements and numbers, and the relationships between financial statements and numbers, and the relationships between financial statements and contracts, will be unable to cope with the problems that are found in connection with business acquisitions or sales.
Professional's Guide to Purchase and Sale of a Business: Taxation, Valuation, Law, and Accounting 2000
Professional's Guide to Purchase and Sale of a Business: Taxation, Valuation, Law, and Accounting 2000,Willard D. Horwich,Harcourt Professional Publishing,0156071118,Accounting - Financial,Business & Economics,Business / Economics / Finance,Business/Economics,Small Business - General,Small Business - Legal Guides,Small Business Finance
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