Selling a Business or Buying a Business in Texas
Buying or Selling a Business in Texas
Experienced legal guidance from letter of intent to closing and beyond.
For many business owners, selling the company is the biggest financial event of their lives. For a buyer, it can be the largest investment they will ever make. A business sale is not like selling a house. There is no standard form contract, and every deal is different. The decisions made at the start of a transaction shape how much money changes hands, who carries which risks, and what happens if something goes wrong after closing.
At Turney & Espino, PLLC, we have helped business owners in The Woodlands, Houston, and across Montgomery and Harris Counties since 2008. We represent both buyers and sellers in the purchase and sale of privately held businesses. Our goal is a deal that closes on time, protects your interests, and lets you move on to the next chapter with confidence.
The Steps in a Business Sale or Purchase
No two transactions are the same, but most follow a similar path. Here is what to expect, and where an attorney adds value at each stage.
Planning and preparation. Before a business goes on the market, or before a buyer makes an offer, the groundwork matters. Sellers should get their corporate records, contracts, licenses, and financial statements in order. Buyers should know how they will finance the purchase and what they need to learn about the target. We help clients spot problems early, when they are still cheap and easy to fix.
Confidentiality agreement. Buyers need sensitive information to evaluate a business. Sellers need to know that information will not end up with a competitor. A well-drafted non-disclosure agreement protects the seller and sets the ground rules for the buyer's review.
Deal structure: asset sale or stock/membership interest sale. One of the most important early decisions is what is actually being sold. In an asset sale, the buyer buys selected assets and usually takes on only the liabilities it agrees to. In a stock or membership interest sale, the buyer buys the owner's interest in the company, along with its history and liabilities. Structure affects taxes, liability, contract assignments, licenses, and employees. Buyers and sellers often have opposite preferences, so this point is frequently negotiated.
Letter of intent. The letter of intent (LOI), or term sheet, sets out the price, structure, payment terms, timeline, and key conditions. Many people treat it as a formality. It is not. Terms agreed in the LOI are hard to change later, and some provisions, such as exclusivity and confidentiality, are usually binding. Having an attorney review the LOI before you sign is one of the most valuable steps you can take.
Due diligence. The buyer investigates the business: financial records, tax returns, contracts, leases, employees, intellectual property, litigation, permits, environmental issues, and debts and liens. For sellers, we help organize disclosures and respond efficiently. For buyers, we review the findings, flag risks, and use them to negotiate price, protections, or conditions.
The purchase agreement. The definitive agreement is the heart of the deal. It covers the price and how it is paid, any earn-out or seller financing, representations and warranties, indemnification, escrows or holdbacks, non-compete and non-solicitation covenants, conditions to closing, and what happens if a party breaches. Every clause allocates risk between buyer and seller.
Ancillary documents. Most deals require supporting documents. These may include a bill of sale, assignments of contracts and leases, promissory notes and security agreements, employment or consulting agreements, transition services agreements, and company resolutions approving the sale.
Third-party consents and approvals. Landlords, lenders, key customers, franchisors, and licensing agencies may need to approve the transfer. We identify these early so they do not delay closing.
Closing. At closing, funds and documents are exchanged and ownership transfers. We prepare the closing checklist, coordinate with lenders, brokers, accountants, and the other side, and make sure everything is signed and delivered correctly.
After closing. The work does not always end at closing. Earn-out payments, escrow releases, purchase price adjustments, transition periods, and non-compete obligations can continue for months or years. We stay available to help enforce your rights and resolve disputes.
How We Help Sellers
You spent years building your business. Our job is to help you get fair value for it and walk away cleanly. For sellers, we:
Help prepare the business for sale by cleaning up governing documents, contracts, and records before buyers start asking questions
Draft confidentiality agreements that protect your information and your relationships with employees and customers
Review and negotiate the letter of intent before you commit to key terms
Advise on deal structure and work with your CPA to understand the after-tax result
Manage due diligence and prepare disclosure schedules that reduce your exposure to later claims
Negotiate representations, warranties, and indemnification terms so your risk after closing is limited and clearly defined
Protect you when part of the price is deferred, through promissory notes, security interests, personal guaranties, and clear earn-out terms
Keep non-compete and transition obligations reasonable in length, scope, and geography
Coordinate the closing so you get paid and your obligations end when they should
How We Help Buyers
Buying an existing business can be a faster path to ownership than starting from scratch, but only if you know what you are buying. For buyers, we:
Help you evaluate the opportunity and choose the right entity to own the business
Review and negotiate the letter of intent so it protects your ability to walk away if diligence turns up problems
Lead or coordinate legal due diligence on contracts, leases, liens, litigation, licenses, employees, and intellectual property
Recommend a deal structure that limits the liabilities you inherit
Help you avoid inheriting the seller's unpaid taxes. In Texas, for example, a buyer can become liable for the seller's unpaid sales taxes unless the right steps are taken before paying the purchase price.
Negotiate strong representations, warranties, and indemnification, backed by escrows or holdbacks where appropriate
Draft non-compete and non-solicitation covenants that protect the goodwill you are paying for
Coordinate with your lender, accountant, and insurance agent so financing and coverage are in place at closing
Make sure contracts, leases, permits, and accounts actually transfer to you
Why an Experienced Business Law Attorney Makes a Difference
Brokers, accountants, and lenders all play important roles in a business sale. But only your attorney's job is to protect your legal interests in every term of the deal. Here is what experienced counsel brings to the table.
You keep more of what you negotiate. The headline price is only one number. Payment terms, purchase price adjustments, escrows, earn-outs, and indemnification caps decide how much money you actually keep or pay. An experienced attorney knows which terms move real dollars and negotiates them.
Risk is spelled out, not assumed. Every purchase agreement divides risk between buyer and seller. Without careful drafting, a seller can face claims long after the sale, and a buyer can inherit debts, taxes, or lawsuits it never agreed to take on. We draft agreements that state clearly who is responsible for what.
Problems are found before they become disputes. Unrecorded liens, contracts that cannot be assigned, missing permits, and employee classification issues are common. Found during diligence, they are bargaining points. Found after closing, they become expensive problems.
The deal stays on track. Deals fall apart over delays, surprises, and miscommunication. We keep a clear checklist, deal directly with the other side's counsel, and push the process toward closing.
Tax and legal planning work together. Deal structure and price allocation can change the after-tax result significantly. Attorney Lisa Espino is also a Certified Public Accountant, so our firm brings a financial perspective to the legal work. We also coordinate closely with your own CPA and financial advisors.
Your business and personal plans stay aligned. A sale often changes your estate plan, and a purchase may call for a new one. Because our practice also includes estate planning, we can help make sure your wills, trusts, and powers of attorney reflect your new situation.
You have an advocate who knows your goals. Your attorney answers only to you. We take time to understand what matters most, whether that is price, speed, protecting employees, or a clean break, and we negotiate with those priorities in mind.
Common Mistakes to Avoid
Signing the letter of intent without legal review. Key terms get locked in before anyone has looked at the risks.
Using a template purchase agreement. Online forms rarely fit the deal and often leave out important protections.
Skipping or rushing due diligence. Buyers who do not look closely may pay for problems they could have found.
Ignoring tax consequences until the end. Structure and price allocation are much harder to change once terms are agreed.
Assuming contracts and leases transfer automatically. Many require consent from the landlord or other party.
Leaving deferred payments unsecured. A seller who finances part of the price needs real collateral and remedies.
Overlooking the owner's personal plans. A sale or purchase should fit your estate plan, retirement plan, and family goals.
Frequently Asked Questions
When should I contact an attorney about selling or buying a business?
As early as possible, and always before you sign a letter of intent. Early advice gives you the most options and helps avoid costly mistakes.
I already have a business broker. Do I still need an attorney?
Yes. A broker markets the business and helps find a buyer or seller. An attorney drafts and negotiates the legal documents and protects your legal interests. The two roles complement each other, and we work well with brokers.
Is an asset sale or a stock sale better?
It depends on taxes, liabilities, contracts, licenses, and each side's goals. Buyers often prefer asset purchases and sellers often prefer stock sales, but the right answer depends on the facts. We help you weigh the tradeoffs with your tax advisor.
How long does it take to buy or sell a business?
Timelines vary. Smaller transactions may close within a few weeks of a signed letter of intent. Larger or more complex deals, or deals that need lender or third-party approvals, can take several months.
What is an earn-out?
An earn-out is a part of the price that is paid later, only if the business hits agreed targets after closing. Earn-outs can bridge a gap in price expectations, but they need clear definitions to avoid disputes.
What happens to my employees when the business is sold?
It depends on the deal structure and the agreement. In an asset sale, the buyer usually decides whom to hire. In a stock sale, employees typically stay with the company. We help address employee issues, including key-employee agreements and benefits.
Can you represent both the buyer and the seller?
Generally, no. The buyer and seller have opposing interests in most deal terms, so each side should have its own attorney.
Talk With Us About Your Transaction
Whether you are getting ready to sell the business you built or looking to buy your next opportunity, Turney & Espino, PLLC can guide you through each step. We serve clients in The Woodlands, Spring, Conroe, Tomball, Houston, and throughout Montgomery and Harris Counties.
Call (281) 645-6749 or request your free initial phone consultation today.
Turney & Espino, PLLC · 1095 Evergreen Cir, Suite 200, The Woodlands, TX 77380 · Monday to Friday, 8:00 AM to 5:00 PM
This page provides general information only and is not legal advice. Viewing this page or contacting the firm does not create an attorney-client relationship. Every transaction is different, and past results do not guarantee a similar outcome.