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Real Estate Attorneys Houston, TX

5 Things to Know When Buying or Selling a Business in Texas

Business Law Attorneys Houston, TX

Image courtesy of Dennis Skley

If you’re an entrepreneur, there are a few things that you should consider before buying or selling your Houston, Texas, business. Regardless of which side of the table you are on, taking the time to ensure that all aspects of the sale are appropriately handled will make the transition a seamless one. Here are five tips to make the process work for you:

  1. Research

There are many benefits to buying an existing business — brand reputation, an existing customer base and stocked inventory — but buyers should fully research any company they are considering purchasing to understand why it’s being sold and what financial shape it’s in. A retiring owner is not an issue, but a failing or struggling business may be. The current owner will be able to provide some information, but you can also contact the county clerk’s office to learn more about previous owners. The Texas secretary of state’s office can provide information about the business’s registration. If the business holds licenses or permits, the regulating organizations can help. Buyers will need to obtain the financial information for the past two years, including assets and liabilities to make an informed decision.

Sellers, on the other hand, have their own research to do. They’ll need to research similar businesses in the Houston area to set a realistic asking price. Sales prices are sometimes based on the value of the business’s assets with brand recognition factored in. Owners can also compare their business with others in the industry that have recently sold to get a sense of the best features to market. Sellers should also consult with a CPA or tax professional before negotiating the sale to lessen the significant tax impact the sale can have. The amount of tax due will be based on how the business is legally organized and whether it’s the assets or the entity that are being sold.

  1. Know What’s Included

Buyers and sellers will need to come to an agreement about exactly what is included in the sale. Key features can include inventory, fixtures and equipment. You also must address intellectual property such as trademarks, patents, customer and vendor databases, the business name, logo and website. This agreement also defines the payment arrangements, including the down payment amount and schedule for installment payments. By clearly documenting the sale, no one will experience any unpleasant surprises.

  1. Secure Licenses and Permits

Both the buyer and the seller need to understand any licenses or permits the business requires. The county clerk must be notified about the ownership change, and the Texas secretary of state needs to be notified if the business is organized as a corporation, limited liability company or partnership. The Texas comptroller of public accounts will need to be notified for sales tax information. Making sure these legal requirements are taken care of is crucial for a smooth sale.

  1. Sign the Sales Agreement

All aspects of the deal should be clearly defined in a sales agreement and signed by both the buyer and seller. This should itemize all assets included in the purchase, contracts and payment schedule. It’s a good idea to ask an attorney that specializes in real estate law to review the agreement. At closing, the business will transfer to the buyer, and both parties will need to jointly file IRS form 8594 for the year of the sale.

  1. Secure the No Tax Due Statement

Finally, buyers need to obtain a Certificate of No Tax Due from the state comptroller. If this statement is not obtained prior to purchase and taxes are owed, the new owner will be responsible for all taxes, interest and penalties.

Buying or selling a business doesn’t have to be a difficult process, but both parties must do their research, agree on the sale terms and submit the appropriate paperwork. Careful planning will lead to a good deal for everyone.

Susan J. Taylor is a Houston-based commercial litigation and business law attorney. She began practicing law in Texas in 1985 with a primary concentration in business, real estate, and commercial litigation. Ms. Taylor is Board Certified in Civil Trial Law by the Texas Board of Legal Specialization. For expert help with commercial litigation, business or real estate law issues, please contact The Taylor Law Group for a consultation.

Real Estate Attorneys Houston, TX

Mortgage Loan Fraud: 5 Red Flags to Look Out For

Real Estate Attorneys Houston, TX

Image courtesy of Cafe Credit

Owning your own home is an integral part of the American dream, but it doesn’t always work out as well in real life. If you’re having trouble making your mortgage payments or are facing foreclosure, you’ve likely wondered about refinancing or loan modification options. While there are some organizations that can provide legitimate help, there are also many scam companies operating around the country, including in the Houston, Texas, area. Read on to discover five major warning signs that indicate you’re dealing with possible mortgage loan fraud.

  1. It sounds too good to be true.

Any time a company starts making unrealistic promises about what it can do, beware. Unscrupulous companies may guarantee they can stop foreclosure proceedings on your home or grant a loan modification, but this is usually part of the scam to get you hooked. Real loan modification companies won’t make any promises or guarantees.

  1. You have to pay a fee.

If you’re talking to someone about your mortgage, and they want you to pay upfront, it’s likely a scam. According to the Federal Trade Commission (FTC) Mortgage Assistance Relief Service (MARS) Rule, this is actually against the law. A company cannot charge or collect any monies in advance for services related to refinancing, modifying or reinstating your mortgage, and this includes charging to talk with your lender on your behalf. The only exception to this is for attorneys who meet specific requirements, and they must put the money directly into a client trust account.

  1. You found out about it through some type of advertising.

If the company or person found you instead of the other way around, it’s best to pass. This includes offers in magazines, newspapers, online postings and any other kind of advertisements as well as unsolicited phone calls and mailings. Companies that use this tactic often try to get you to provide personal information prematurely. To protect yourself, never provide identifying information, including bank account numbers, to anybody you didn’t contact or haven’t verified is a legitimate business.

  1. You have to sign over your title or sign a contract.

Pressuring you into signing over the title to your home is one of the main ways scam companies trick you. This is because signing over the title does not automatically stop the foreclosure. These companies/agents often also try to get you to sign the paperwork quickly without reading it over or understanding it thoroughly. They may assure you that it’s just the “usual” stuff or tell you that “It’s no big deal.” However, any time you sign a document, you are taking a chance. To make sure you’re covered, have an attorney or legitimate housing counselor look over the paperwork before you sign.

  1. You have to stop or redirect your payments.

If a company tells you to stop paying your mortgage, run away quickly. Not making your payments does not make it easier to get a modification or refinancing and can do serious long-term damage to your credit. A reputable company will also never ask you to make your mortgage payments to them instead.

Think you’ve already been the victim of mortgage fraud? The first step is to report the possible scam to the proper state and federal agencies. You’ll also want to talk to a knowledgeable real estate lawyer to help you get more information on your options moving forward.

Susan J. Taylor is a Houston-based commercial litigation and business law attorney. She began practicing law in Texas in 1985 with a primary concentration in business, real estate, and commercial litigation. Ms. Taylor is Board Certified in Civil Trial Law by the Texas Board of Legal Specialization. For expert help with commercial litigation, business or real estate law issues, please contact The Taylor Law Group for a consultation.

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