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I am purchasing an existing business. There are liabilities…

I am purchasing an existing...
I am purchasing an existing business. There are liabilities associated with the cases served in this business, as there will be with the ones I serve moving forward. My question has two parts. This is a goodwill/blue skies purchase, there really aren’t assets associated with the business. One, what do I need to do to make sure that I am not assuming past liabilities for cases before I assumed the business? Two, I have an existing LLC that I am merging with this new company. Can I continue my own LLC and register a DBA for the name, letting the previous owners still own there into thus removing me from the risk?
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Answered in 7 minutes by:
3/13/2018
Damien Bosco
Damien Bosco, Attorney
Category: Business Law
Satisfied Customers: 4,156
Experience: Helping you with your legal questions.
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Hello again: My name is ***** ***** I am an attorney. Please give me a moment to review your question. I may ask some questions to clarify issues.

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I helped you with a previous question you had.

When someone purchases the shares of a corporation or membership interest in an LLC, there is a risk the liability of outstanding debts or pending litigation can become the new company's liability. Sometimes it is recommended that the purchasing company enter into an asset purchase agreement rather than a stock purchase agreement of the shares or membership interest because that way it is not also taking on the liability. Further, if it is still a concern, there could be an indemnity agreement, but not necessarily necessary.

Also, if the company is only purchasing the assets (include goodwill, which is an asset) then it can continue with the current LLC and do a dba with the name it likes and the previous owner maintains ownership of the other company.

We can discuss this more if you want to do so.

If you have further questions or you need further assistance, just let me know.

If not, please remember to rate my answer between 3 to 5 stars without any additional costs to you. That is how I get credit for answering your question. Best regards.

Damien Bosco
Damien Bosco, Attorney
Category: Business Law
Satisfied Customers: 4,156
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Customer reply replied 1 month ago
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You are welcome!

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