Buying or selling a business in Texas is a major decision. It can affect your money, your responsibilities and your plans going forward. Each step has legal rules that matter. Missing something early can cause problems later.
Business valuation and preparation
The process usually starts by figuring out what the business is worth. Sellers often collect financial records, tax returns, contracts and employee information. This helps set a fair price.
Buyers use this information to decide if the business makes sense for them. Good preparation can also uncover problems early. Missing paperwork or unpaid debts can slow the deal or lower the value.
Letter of intent and due diligence
Many deals begin with a letter of intent called an LOI. This document explains the basic terms being discussed like price and deal type. It usually is not a final agreement. Some parts like confidentiality are often binding.
After the LOI, the buyer reviews the business in detail. This step is called due diligence. It includes looking at finances, contracts, lawsuits, taxes and ownership of things like trademarks. Due diligence helps the buyer spot risks that may not be obvious at first.
Structuring the deal and drafting agreements
You must decide whether the transaction will be an asset sale or a stock sale. Asset purchases allow buyers to select which assets and liabilities transfer. Stock sales transfer the entire entity including existing obligations.
The purchase agreement then governs the deal. It typically addresses representations, warranties, indemnification, non-compete terms and closing conditions. This document controls what happens if problems arise after closing.
Texas tax clearance and closing
Texas law can impose successor liability for unpaid state taxes. Under Texas Tax Code § 111.020, buyers may become responsible for a seller’s unpaid taxes unless a Certificate of No Tax Due is obtained from the Comptroller. This requirement makes tax clearance a critical step before closing.
Closing involves executing final documents such as bills of sale and lease assignments. Funds transfer and ownership legally changes.
Why legal guidance matters
Business sales involve overlapping contract, tax and regulatory issues. Missing a consent, misunderstanding liability exposure or overlooking statutory requirements can create costly disputes later.
Working with an attorney familiar with business transactions helps you understand risks at each stage. Legal guidance can also support negotiations, document drafting and compliance with Texas law.
Careful legal planning does not guarantee a perfect outcome. It can help you move forward with clearer expectations and fewer surprises.