Whether you are buying a business to grow or selling one you built, the transaction is more complex than most people expect. Here is a high-level overview of what to anticipate.
The process typically starts with a Letter of Intent (LOI), which outlines the key deal terms: purchase price, structure (asset sale vs. stock sale), payment terms, and major contingencies. The LOI is usually non-binding on the business terms but binding on exclusivity and confidentiality. This document sets the framework for everything that follows.
The biggest structural decision is whether the deal is an asset purchase or a stock purchase. In an asset purchase, the buyer acquires specific assets and assumes specific liabilities. In a stock purchase, the buyer acquires the ownership interests of the entity itself, including all assets and liabilities. Sellers generally prefer stock sales for tax reasons; buyers generally prefer asset purchases for liability protection. The right structure depends on both parties' tax situations.
Due diligence is where the buyer digs into the business. This includes reviewing financial statements, tax returns, contracts, employee agreements, intellectual property, regulatory compliance, litigation history, and more. Sellers should prepare for this process in advance by organizing their records and identifying potential issues before the buyer finds them.
The definitive purchase agreement is the final contract. It includes representations and warranties (factual statements both parties make about the business), indemnification provisions (who covers losses if those statements turn out to be false), closing conditions, and post-closing obligations like non-compete agreements and transition services.
One critical point: get your own attorney. Do not rely on the other side's attorney to protect your interests, and do not try to do this without legal counsel. The cost of an attorney in a business sale pays for itself many times over.
Have questions about buying or selling a business? Schedule a free consultation with Newmen Law to discuss your specific situation.
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April 23, 2026
Kaveh Newmen, Esq.
Succession planning is one of those topics that every business owner knows is important but few actually address. The result is that when the time comes, whether planned or unplanned, the transition is chaotic, value is lost, and relationships are strained.
Succession planning answers a simple question: who takes over when you step away, and how? The answer involves legal documents, financial planning, and operational preparation.
Start by identifying your succession scenario. Are you planning to sell the business to a third party? Transfer it to a family member? Promote an internal leader? Merge with another company? Each scenario requires different planning. A sale to a third party requires the business to be positioned for maximum value. A family transfer requires estate planning and possibly a gifting strategy. An internal promotion requires training, equity transition, and often seller financing.
Next, get your business ready to operate without you. This means documenting key processes, ensuring client relationships are not solely dependent on you, building a management team that can make decisions independently, and organizing your financial records so a buyer or successor can understand the business quickly.
From a legal standpoint, your succession plan should include updated operating agreements or shareholder agreements with buy-sell provisions, key person life and disability insurance, an estate plan that addresses business interests, employment agreements with key employees that include retention incentives, and non-compete or non-solicitation agreements where appropriate.
The best time to start succession planning is five to ten years before you plan to exit. The second-best time is now. Businesses that plan their transitions sell for more, transition more smoothly, and create better outcomes for everyone involved.
Have questions about succession planning? Schedule a free consultation with Newmen Law to discuss your specific situation.
April 23, 2026
Kaveh Newmen, Esq.
Unpaid invoices are one of the most frustrating realities of running a business. You did the work, delivered the product, or provided the service, and now the other side is not paying. Here is a practical approach to getting paid.
Start with a direct conversation. Many payment disputes result from misunderstandings, cash flow issues, or simple administrative errors. A phone call asking about the status of payment is often enough to resolve the issue. Keep it professional and document the conversation.
If conversation does not work, send a formal demand letter. A demand letter from your attorney carries significantly more weight than an email from your accounts receivable department. The letter should clearly state the amount owed, the basis for the obligation (reference the contract or invoice), a deadline for payment (typically 10-15 business days), and a statement that you will pursue legal remedies if payment is not received. Most legitimate businesses pay after receiving a well-drafted demand letter.
If the demand letter does not produce payment, you need to evaluate whether litigation is worth pursuing. Consider the amount owed, the likelihood of collection (does the debtor have assets or are they judgment-proof?), and the cost of litigation versus the recovery. For smaller amounts, California small claims court handles claims up to $10,000 (or $5,000 for businesses) with no attorney required.
For larger amounts, a formal lawsuit may be necessary. In many cases, filing the lawsuit itself prompts settlement discussions. The key is to move quickly. Statutes of limitations apply to collection claims, and the longer you wait, the harder collection becomes.
Prevention is always better than collection. Use clear payment terms in your contracts, require deposits or progress payments for large projects, and follow up on overdue invoices immediately rather than letting them age.
Have questions about business collections? Schedule a free consultation with Newmen Law to discuss your specific situation.
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April 23, 2026
Kaveh Newmen, Esq.
As a business owner, you face liability risks that most people do not. Lawsuits from customers, employees, competitors, partners, and regulators are a reality of operating a business. Asset protection planning is about ensuring that a single adverse event does not wipe out everything you have built.
The first line of defense is your business entity. If your business is properly structured as an LLC or corporation and you maintain the separation between your personal and business finances, your personal assets should generally be protected from business liabilities. This is called the corporate veil, and it only works if you respect it. That means maintaining separate bank accounts, not commingling personal and business funds, keeping corporate formalities, and adequately capitalizing the entity.
The second strategy is insurance. General liability, professional liability (errors and omissions), directors and officers (D&O) insurance, and an umbrella policy can cover most claims before they reach your personal assets. Insurance is often the most cost-effective asset protection tool available.
Beyond entity structure and insurance, additional strategies include separating high-risk and low-risk activities into different entities. For example, owning your business real estate in a separate LLC from your operating company means a lawsuit against the operating company cannot reach the real estate.
For personal assets, strategies include homestead exemptions (California provides significant protection for your primary residence), retirement accounts (generally protected from creditors under both federal and California law), and certain trust structures that can provide additional protection.
One important note: asset protection planning must be done before a claim arises. Transferring assets after you know about a potential liability is a fraudulent transfer, which can be reversed by a court and can create additional liability. Plan ahead, not after a lawsuit is filed.
Have questions about asset protection? Schedule a free consultation with Newmen Law to discuss your specific situation.
