Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at [email protected] or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.
Changes in business ownership or relationships will require a selection of documents that help outline the details. These include a written purchase agreement, which outlines the overall situation. A receipt for the money or other items that are changing hands and a form of consent to the transaction of any business entity should be in writing, as well.
If money is borrowed or loaned, the promise to repay the money should be explained in its own document. As ownership changes and the business structure is altered, the new operational requirements for affected entities will also need to be updated and outlined in a document as a part of the transaction.
My clients regularly hire me to help to change the ownership of businesses and change business relationships. Unless a client has been through the process before, they can be surprised at the number of documents that are prepared in conjunction with the transaction. There are five documents that are usually a part of the restructure or change of ownership of a business.
First, there is usually one document that explains the entire situation and what the people involved in the business are trying to do. Frequently, this document is a purchase agreement. The document will likely break out into three parts. There is an introduction that identifies the people involved. There is a list of recitals that identifies facts regarding who owns what, who wants to do or change something and usually why the people want the change. The final component is a detailed list of the literal terms upon which the participants agree.
Read more about these common business documents in Lee’s article in the Lima News, “Legal-Ease: Common business documents explained.”
Source: LimaOhio.com, “Legal-Ease: Common business documents explained,” by Lee R. Schroeder, January 29, 2017.