Buying and Selling Businesses: Key Questions to Ask

By: Attorney Amanda N. Sacks & James R. Danaher, Schloemer Law Firm, S.C.

Schloemer Law Firm is a Wisconsin based law firm that specializes in assisting with buying and selling businesses. Our mergers and acquisitions (M&A) team is recognized by local businesses and manufacturers as the go-to firm for M&A transactions. We routinely counsel clients in asset, stock, or merger transactions.

If you are preparing to buy or sell a business, there are critical questions that will need to be considered and negotiated:

  1. Due Diligence & Confidentiality:
    • Has the buyer signed a Confidentiality and Non Disclosure Agreement (NDA) to ensure that all negotiations and information are kept confidential?
    • Have 3 years of accurate financials been provided to the prospective buyer?
    • What is the business’ cash flow?
    • Are there any factors that could impact the financial forecast of the business?
    • Will inspections of assets (equipment or real property) be needed prior to closing?
  2. Assets:
    • Which assets are included with the sale?
    • Are there Intellectual Property rights to be transferred?
    • Which assets are excluded?
  3. Purchase Price & Payment Terms:
    • How will the purchase price be determined?
    • How will the purchase price be paid? Will it be paid in cash at closing, or will part or all of the purchase price be paid by a seller note or and ‘earn out’ provision?
    • How will the purchase price be allocated to different classes of assets?
  4. Debts and Liabilities:
    • Who is responsible for existing debts and liabilities?
    • Will Buyer be assuming any of the Seller’s contracts?
    • Do any of the contracts need to be updated as part of the transfer?
  5. Risk Exposure and Representations & Warranties:
    • Does the business have any areas of risk that need to be addressed, such as environmental concerns, threatened litigation, or potential claims from employees?
    • Should a portion of the purchase price be held in escrow should Buyer discover any problems following closing?
    • What will the Seller and Owner be required to represent and warrant, and for how long?
    • Should the Seller consider representation and warranty insurance?
    • Will there be a “cap” on the potential damages for a breach of a representation or warranty?
  6. Work In Progress (WIP):
    • Will Buyer assume responsibility for completing WIP?
    • If so, how will this affect the purchase price?
  7. Accounts Receivable:
    • Will Accounts Receivable be retained by the Seller, or purchased by the Buyer?
    • Who will handle collections after closing?
  8. Real Estate:
    • Is real estate included in the sale?
    • Will a lease need to be transferred, or will the Buyer need to enter into a new lease where the business operates or business assets are stored?
  9. Inventory:
    • Is inventory included in the sale?
    • Will there need to be a final inventory count and adjustment to the purchase price?
    • Is any of the inventory obsolete or slow moving and should be discounted?
  10. Employees:
    • Will all employees be hired by the purchaser?
    • Do employee handbooks, employment policies, or employee pay structures or benefits need to be updated?
  11. Transition of Ownership:
    • Will the business owner stay on to assist with the transition as a consultant or employee?
    • Will the existing owner need to sign a non-compete or other restrictive covenant as part of the sale?


Schloemer Law Firm is experienced in assisting with mergers, acquisitions, and sales of Wisconsin businesses.  You can read more about our experience here.

If you’d like to talk to a Wisconsin business law attorney experienced in handling these matters, please contact this articles authors, Attorneys Amanda N. Sacks [email protected] or James R. Danaher [email protected], or call us at 262-334-3471 to schedule a time to meet with one of our Wisconsin Business Law Attorneys.

Originally published: March 10, 2023.

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Disclaimer: The information contained in this post is for general informational purposes only and is not legal advice. Due to the rapidly changing nature of law, Schloemer Law Firm makes no warranty or guarantee concerning the accuracy or completeness of this content. You should consult with an attorney to review the current status of the law and how it applies to your unique circumstances before deciding to take—or refrain from taking—any action.  If you need legal guidance, please contact us at 262-334-3471 or [email protected].