As purchaser of a business, you need to be certain that the sale of the business has been authorized as required by law and by the seller’s organization documents. This usually is a straightforward task, but can be problematic when there is a lone wolf owner of the seller who has distanced himself from the business. Corporate statutes in all states set forth the percentage vote required to approve a sale transaction. Some states allow a company’s corporate documents to change the statutory percentage. When purchasing a business, you need to understand the percentage vote required and make sure that the seller presents proof to you of obtaining that vote. A disgruntled uncooperative owner who has distanced himself from the business (i.e., a lone wolf) may hold enough ownership to block the sale. It is important that you understand the ownership structure of the seller at the inception stage of the negotiations. Otherwise, a lone wolf owner who surfaces near closing could not only interrupt, but also hold up, the closing. Worst yet, if you closed on the purchase without the requisite vote of the seller, the lone wolf owner could attempt to upend the sale.
ABOUT GLENN D. SOLOMON
Glenn D. Solomon Esq., is a principal at the law firm of Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years, with extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With 120 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our eight offices serve individual and corporate clients in the Maryland, Delaware, New Jersey, and Northern Virginia markets, as well as the Washington DC, Baltimore, Philadelphia, and New York City metropolitan areas. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
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