Selling a Business with a Pending Lawsuit: Disclosure, Indemnification, and Deal Structure Options
Selling a Business with a Pending Lawsuit: Disclosure, Indemnification, and Deal Structure Options Quick Answer A pending lawsuit does not stop a business sale, but it does require careful handling across four dimensions: (1) full disclosure to the buyer (concealing material litigation creates fraud exposure and almost guarantees a post-close indemnification claim or rescission), (2) […]
M&A Employee Retention Bonus: Key Employee Retention Bonus in
M&A Employee Retention Bonus: Key Employee Retention Bonuses in a Business Sale: Structure, Tax Treatment, and Who Pays Quick Answer A key employee retention bonus is a cash (sometimes equity) award paid to specific employees who agree to stay through and beyond a business sale, typically in the range of 15-30% of annual base salary, […]
Contract Assignability in a Business Sale: What Transfers, What Requires Consent, and How Deal Structure Changes the Answer
Contract Assignability in a Business Sale: What Transfers, What Requires Consent, and How Deal Structure Changes the Answer Quick Answer Contract assignability in a business sale is governed by (1) the contract’s specific language on assignment and change of control, (2) the deal structure (asset sale vs stock sale), and (3) applicable state law defaults. […]
Signs Your Company Is Being Sold: Telling Vendors Your Business Is
Signs Your Company Is Being Sold: When and How to Tell Vendors Your Business Is Being Sold (Without Wrecking the Deal) Quick Answer Most business owners should not tell vendors a sale is happening until after a Letter of Intent is signed, and even then only for material vendors whose consent or contract assignment is […]
Telling Customers Your Business Is for Sale: Timing, Confidentiality, and Key-Account Retention (2026)
Telling Customers Your Business Is for Sale: Timing, Confidentiality, and Key-Account Retention (2026) Quick Answer Most M&A practitioners recommend announcing a business sale to customers only AFTER closing, not during the deal process. Pre-close customer notification creates three risks: (1) customer attrition as accounts use the sale as an opportunity to renegotiate or switch, (2) […]
Signs Your Company Is Being Sold: How to Tell Employees Business Is
Signs Your Company Is Being Sold: How to Tell Employees Your Business Is Being Sold: Timing, Script, and Retention Strategy (2026) Quick Answer Most M&A practitioners recommend announcing a business sale to employees between LOI signing and deal close, typically 30-60 days before close. Earlier disclosure risks deal collapse if employees leave or customers learn […]
Selling a Business: Trust Ownership vs LLC vs Personal Holding — Tax Implications (2026)
Selling a Business: Trust Ownership vs LLC vs Personal Holding — Tax Implications (2026) Quick Answer The optimal pre-sale ownership structure depends on five factors: (1) federal estate tax exposure (the 2026 exemption is approximately $13.99M per individual under TCJA, scheduled to sunset to ~$7M in 2026 unless extended), (2) state income tax on the […]
Deferred Compensation in a Business Sale: Section 409A, Earnouts, and Tax Timing for Sellers (2026)
Deferred Compensation in a Business Sale: Section 409A, Earnouts, and Tax Timing for Sellers (2026) Quick Answer Deferred compensation arises in many business sales — most commonly through earnouts, post-close consulting fees, retention bonuses, and rollover-equity vesting arrangements. The federal tax treatment depends on whether the arrangement is classified as (a) deferred purchase price (capital […]
Installment Sale vs Cash Sale: When Seller Financing Makes Sense in a Business Sale (2026)
Installment Sale vs Cash Sale: When Seller Financing Makes Sense in a Business Sale (2026) Quick Answer An installment sale (seller financing) spreads the recognition of capital gain across the years payments are received under IRC §453, instead of taxing the entire gain in the year of sale. The benefit: a seller can stay in […]