Gallop, Johnson & Neuman Advises: Delays in Preparing a Business for Sale May Negatively Impact Negotiations with Potential Buyers
Five-Point To-Do List Can Make Business Sale Process Easier and May Increase Value


ST. LOUIS, MO, July 23, 2010 /24-7PressRelease/ -- Mary M. Bannister, a partner in the Mergers and Acquisitions Practice Group at law firm Gallop, Johnson & Neuman, L.C., advises that delays in preparing a business for sale in today's economic environment may negatively impact negotiations with potential buyers and, possibly, defer sale of the business.

Ms. Bannister represents both public and private companies in acquisitions and divestitures, including in matters of contracts and financing. She observes: "If you are a business owner who put aside the idea of selling your successful company because of the nation's economic downturn, don't treat this interlude as a waiting period. Use this time to prepare. Taking strategic action sooner rather than later will make the business sale process easier and may increase the value that you receive."

Ms. Bannister's five-point "to-do" list for business owners who are considering potential sale of their company includes:

1) Begin tax planning now. "It is crucial to understand the potential tax impact of a sale on both you and your company," Bannister says. "Actions you can take now may help you obtain favorable tax treatment when a sale occurs later. In fact, sophisticated tax planning often requires that certain actions be taken years in advance of a sale."

2) Make sure company legal documents are up to date. "Complete a legal review of all your company's organizational documents, ownership records and ownership or partnership agreements because some or all of them may need updating before you reveal them to a potential buyer for review," Bannister advises.

3) Check business contracts. "Review all business contracts and vendor service forms used by your business and, if necessary, update them to reflect any recent changes in applicable laws, new regulatory requirements or changes in your business practices," she says. "Simultaneously, make certain that form contracts can be easily assigned or transferred to a buyer of your business. Review key existing contracts and identify those that cannot be assigned or transferred to a buyer. Address such issues when any contract is renewed and before any sales process begins. Be sure you have complete, authenticated copies of all such contracts, including reverse sides of form contracts that may be missing. Potential buyers will ask to review every contract used by your company -- sometimes even contracts as minor as those for postage meter services."

4) Identify and protect valuable intangible assets. "Intellectual property and trade secrets are extremely valuable business assets; in this regard, make sure that your business has appropriate employee confidentiality agreements in place," Bannister advises. "In addition, carefully review your company's product names, marks, brand nomenclature, product formulas and any proprietary manufacturing or service procedures to determine if any of them should become or be renewed as registered trademarks, service marks, copyrights or patents, or otherwise protected. Your company's intellectual property and trade secrets and, for example, any related licensing agreements, will likely impact the perceived value of your business."

5) Organize professional team members. "If you are contemplating the sale of your business, it is crucial to approach attorneys and accountants who specialize in Mergers and Acquisitions to discuss pre-negotiation and pre-sale actions that can favorably position your firm among potential buyers," she says. "Delays in completing these activities in a timely manner by your company may negatively impact negotiations and due diligence conducted by parties interested in acquiring your company, potentially postponing or deferring its sale."

Ms. Bannister provides counseling and representation in a diverse range of matters relating to business operations and structure, including business formation, business reorganizations, negotiating and drafting business contracts, and financing arrangements. She earned a J.D. degree Magna Cum Laude from Saint Louis University School of Law. Ms. Bannister can be reached at 314.615.6000.

Gallop, Johnson & Neuman, L.C., a full service law firm of 80 attorneys, has provided legal services to clients in diverse industries since 1976 and is one of the largest law firms in St. Louis. The firm serves public corporations, privately-held companies, entrepreneurs and start-up enterprises, individuals and families, trustees and trust beneficiaries, charities, and non-profit entities. For more information about Gallop, Johnson & Neuman, contact Lois A. LaDriere, Director of Marketing, at 314.615.6000 or visit the website http://www.gjn.com. Media contact: Jeff Dunlap at 314.993.6925.

Pursuant to Missouri Supreme Court Rule 4-7.2: The choice of a lawyer is an important decision and should not be based solely upon advertisements.

Further Related Resources:


Press Release Contact Information:

Jeff Dunlap
PowerlinePR
President
Jeanne Hills
St. Louis, Missouri
USA 63146
Voice: 314 993 6925
Website: Visit Our Website