Business & Corporate Law
Mergers, Acquisitions and Business Sales
Last updated June 2026
5 min read
✓ Verified Jun. 2026Buying or selling a business is the largest transaction most owners will ever sign, and the structure of the deal decides who keeps which liabilities and how the proceeds are taxed. I represent buyers and sellers in business acquisitions and sales across Bucks County and the surrounding region, from the letter of intent through closing and the post-closing obligations that follow. The work covers the deal terms, the diligence, the definitive agreement, and the financing that funds the purchase.
The first decision in any acquisition is how the deal is structured, because it drives both risk and tax treatment.
In an asset sale, the buyer selects which assets to acquire and which liabilities to assume. Buyers generally prefer asset sales because they can leave unwanted liabilities behind. In a stock or membership-interest sale, the buyer acquires the entity itself and takes it with all of its assets and liabilities. Sellers generally prefer equity sales for the cleaner exit and the capital gains treatment. The right structure depends on the liabilities involved, the tax position of each side, and the nature of the assets, including contracts and licenses that may not transfer cleanly in an asset deal. The Buying or Selling a Business page covers this decision in more detail.
A typical acquisition moves through a defined sequence, and each stage protects the parties differently:
Most acquisitions are funded in part by debt, and the financing documents deserve the same attention as the purchase agreement. I handle the lending side of a transaction, including loan agreements and promissory notes, security agreements that grant the lender a lien on business assets, UCC-1 financing statements that perfect that lien, and the personal guaranties lenders frequently require from the owners.
Seller financing is common in smaller deals, where the seller carries part of the purchase price rather than the buyer funding the entire amount at closing. Those arrangements raise their own priority and security questions. The Purchase Money Mortgages and Seller Financing page addresses the lien-priority issues that arise when the seller finances the sale.
A buyer paying for a business is paying for its goodwill, and a non-compete from the seller protects that goodwill. Pennsylvania enforces restrictive covenants tied to the sale of a business more readily than ordinary employment non-competes, because the seller received direct consideration for the promise. The terms still have to be reasonable in duration, geography, and scope. For the general framework, see Non-Compete, Non-Solicitation and Restrictive Covenants and Are Non-Competes Enforceable in Pennsylvania?.
An acquisition is often the endpoint of a longer plan. Owners preparing to sell benefit from getting their corporate governance and records in order well before diligence begins, since a clean entity sells more easily and at less discount. For owners transferring a business to the next generation or to key employees rather than an outside buyer, see Business Succession Planning.
It depends on the liabilities and the tax positions of both sides. Buyers usually prefer an asset sale because it leaves unwanted liabilities behind. Sellers usually prefer a stock or membership-interest sale for the clean exit and capital gains treatment. The contracts, licenses, and permits involved also matter, because some do not transfer automatically in an asset deal. This is the first issue to resolve, because it shapes the entire agreement.
A letter of intent is worth the effort even though most of it is non-binding. It aligns the parties on price and structure before they spend money on diligence and legal fees, and its binding confidentiality and exclusivity provisions protect the buyer’s investment in the process. Skipping it tends to surface fundamental disagreements late, after costs have been incurred.
They are the factual promises each side makes about the business, covering matters such as finances, contracts, liabilities, and litigation. They matter because they allocate risk: if a representation turns out to be untrue, the indemnification terms determine who bears the loss. That allocation is usually the most heavily negotiated part of a purchase agreement.
Yes, and it is common in smaller transactions. The seller carries a portion of the price, typically secured against the business assets and documented with a promissory note and security agreement. The key issues are the interest terms, the security, and the lien priority relative to any other lender. The Purchase Money Mortgages and Seller Financing page covers the priority questions in Pennsylvania.
Statutory content on this page was last verified against Pennsylvania statutes (20 Pa.C.S.; 72 P.S. Art. XXI): Jun. 2026. If you are reading this significantly after that date, confirm key provisions with current statute text or contact our office.
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