Buying or selling a business is a complex process, as both the buyer and the seller must consider a series of factors that influence before, during, and after the transaction.

Each process is different because every business is unique. They all have their peculiarities, and there are usually so many of them that it’s best to leave them in the hands of a qualified professional team. They will provide an objective valuation, necessary for negotiating under the best but realistic conditions.

“When we do business, we know that it involves many risks, but we also know that it involves many related areas. This is legally called structuring an operation,” explains our managing partner, Hector Torres.

Our business advisory specialist exemplifies this by stating that when someone buys a business or a company, they typically need to review financial, commercial, and legal matters. This is called structuring the operation.

“You’ll likely need professional assistance from accountants, finance experts, and a lawyer when buying a company. It’s essential not to forget to conduct a review with shareholders or individuals directly involved,” emphasizes Torres.

In light of this, our lawyer recommends requesting the legal, operational, and financial agreements of the company you intend to acquire. This will provide insight into the obligations and responsibilities you will be taking on.

Among some of the records and documents that our managing partner recommends requesting are:

1. Financial statements from the past few years.
2. Every agreement the organization has entered into.
3. Monthly and annual tax declarations.
4. Inventory records.
5. Asset list.
6. Anti-money laundering program.
7. Operating licenses and permits.
8. Solvency records.

“It’s common for the business numbers to look great from a legal perspective, but the tax and fiscal aspects can make the business expensive or unprofitable. It’s always advisable to structure the operations to avoid future risks,” says Torres.

Additionally, Torres mentions other mechanisms to prevent issues with the new business, either through warranty clauses to secure commitments from the other party, establishing resolutive conditions, or drafting a letter of intent to lay the groundwork for the future sales contract and warranties.

For inquiries, you can contact us through our social media channels or visit our offices in Colonia Escalón, San Salvador.