Free Texas Business Sale Guide

Buying or Selling a Business in Texas?

Understand the deal structure, documents, and legal questions to address before you sign.

A resource from Massingill, founded by Joshua Massingill, Texas business attorney. Joshua’s practice includes corporate transactions and business counsel.

Get a practical overview of asset and equity sales, due diligence, financing, purchase agreements, and the transition after closing.

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Buying or Selling a Business in Texas — free guide from Massingill

Inside: Asset sales, equity sales, due diligence, financing, brokers, and attorneys.

Deal roadmap From initial negotiations through closing and post-closing transition.

What You’ll Learn

Understand the structure

Explore asset and equity sales and the questions that shape a purchase or sale.

Prepare for due diligence

Understand the records, contracts, and obligations that deserve attention before closing.

Know what comes next

Follow the process from initial negotiations through financing, closing, and transition.

Who This Guide Is For

For buyers

Evaluating an acquisition? Learn what to ask about the assets, liabilities, financing, and agreements involved.

For sellers

Preparing to sell your company? Understand the process and questions about payment, deal structure, and your responsibilities after closing.

Inside the Guide

Letters of intent, due diligence, and purchase agreements
Asset sales, equity sales, and business valuation
Tax considerations to discuss with your CPA
Seller financing, bank loans, and SBA loans
Real estate, earnouts, non-competes, and transition services
Business brokers, attorneys, and legal fees

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Preview: The Business Purchase and Sale Process

Every transaction has its own sequence and conditions. Use this roadmap to identify the decisions to discuss with your attorney, CPA, and lender before committing to a purchase or sale.

Prepare and protect information. Sellers organize records and identify who can authorize the sale. Buyers clarify their acquisition goals and financing. Discuss confidentiality before sharing sensitive business information.
Outline the proposed deal. Identify the assets or ownership interests, price, payment terms, and anticipated timeline. Have counsel review a letter of intent before signing; some provisions may create binding obligations.
Investigate the business. Review financial records, contracts, debt, employees, intellectual property, disputes, leases, and licenses. Resolve unanswered questions and identify required third-party consents.
Negotiate the agreement and financing. Address what transfers, which obligations remain, the parties’ promises, closing conditions, and remedies if something goes wrong. Coordinate financing requirements with the purchase agreement.
Close and manage the transition. Confirm required documents, approvals, funds, and deliverables. Plan for operational handoff, post-closing payments, notices, and any continuing responsibilities.

Asset Sale vs. Equity Sale: Questions to Compare

Common structural differences to discuss with your advisers
Issue	Asset sale	Equity sale
What is purchased?	Specified business assets, with the agreement identifying included and excluded items.	Ownership interests in the entity, such as stock or LLC membership interests.
What happens to liabilities?	The agreement allocates assumed and retained obligations. An asset purchase does not automatically eliminate all exposure to prior liabilities.	The entity generally retains its obligations even though its owners change. Due diligence and contractual protections remain important.
What needs consent?	Assignments of contracts, leases, and other rights may require consent. Licenses and permits need separate review.	Change-of-control terms, lender requirements, and regulatory rules may require consent or other action.
What should the CPA review?	Purchase-price allocation and the tax treatment of the assets and payments.	The tax treatment of the ownership-interest sale, including entity-specific issues and any proposed elections.

Buyer Preparation Checklist

Define the assets or ownership interests you intend to acquire and the source of funds.
Request records that support revenue, expenses, ownership, debt, and material business obligations.
Identify key customer contracts, employees, leases, licenses, and intellectual property needed to operate after closing.
Discuss unresolved risks, closing conditions, and transition support before committing.

For a closer look at the buyer’s process, read our overview of buying an existing business in Texas.

Seller Preparation Checklist

Organize financial statements, tax returns, ownership records, contracts, and employee information.
Identify liens, personal guarantees, consent requirements, and obligations that may continue after closing.
Discuss payment timing, seller financing, transition duties, and tax consequences with your advisers.
Plan how confidential information will be shared and how employees, customers, and vendors will be informed.

For more detailed preparation steps, read our selling a business in Texas checklist.

This preview is general information, not advice for a particular transaction. Request the free business sale guide for a broader overview, or discuss your deal with our team.

A Starting Checklist for Your Transaction

Use these questions to prepare for a conversation with your legal and financial advisers.

Define the deal: What assets or ownership interests are being sold, and which obligations need review?
Gather the records: Organize financial statements, tax returns, contracts, leases, and employee information.
Review the proposed terms: Discuss the letter of intent, price, financing, and closing conditions before signing.
Plan the handoff: Identify transition services, notices, assignments, and payments that may continue after closing.

Need help applying these questions to your deal? Learn about Massingill’s Texas business-law services or discuss your transaction with our team.

Why Business Sale Structure Matters in Texas

When buying or selling a business in Texas, one of the most important early decisions is how the transaction will be structured. Some deals are handled as asset sales, where the buyer purchases specific business assets and assumes selected liabilities. Other deals are structured as equity sales, where the buyer purchases ownership interests in the company itself.

The difference can affect due diligence, taxes, contracts, leases, employee transition, licenses, debt, indemnity obligations, and post-closing risk. A buyer may want an asset purchase to limit exposure to unknown liabilities, while a seller may care deeply about tax treatment, payment timing, and release from future obligations. The right structure depends on the business, the industry, the parties’ goals, and the legal and financial realities of the deal.

Our free business law guide explains these issues in plain English so Texas business owners, buyers, and sellers can better understand the transaction process before signing a letter of intent, purchase agreement, or closing document.

Business Purchase FAQ

Questions About Buying or Selling a Business

If you are preparing to buy a business, sell a business, or evaluate a potential acquisition, these frequently asked questions explain common legal issues that arise in business purchase and sale transactions.

What should I know before buying a business?

Before buying a business, you should understand the deal structure, purchase price, assets and liabilities, contracts, employees, leases, financing, tax considerations, and due diligence process. A business purchase agreement should clearly explain what is being purchased, what liabilities are being assumed, and what conditions must be satisfied before closing.

What should I know before selling a business?

Before selling a business, owners should prepare financial records, contracts, lease documents, customer and vendor agreements, employee information, intellectual property records, and a clear explanation of the business operations. Sellers should also consider valuation, tax consequences, confidentiality, non-compete obligations, transition services, and whether the sale will be structured as an asset sale or equity sale.

What is the difference between an asset sale and an equity sale?

In an asset sale, the buyer purchases selected business assets and may assume only certain liabilities. In an equity sale, the buyer purchases ownership interests in the company, such as stock, membership interests, or units. Asset sales and equity sales have different legal, tax, liability, due diligence, and contract-assignment consequences.

Do I need a lawyer to buy or sell a business?

A business lawyer can help buyers and sellers structure the transaction, draft or review the letter of intent, negotiate the purchase agreement, manage due diligence, address contracts and leases, and prepare closing documents. Business sale transactions often involve significant legal and financial risk, so legal guidance is usually important before signing binding documents.

What is a letter of intent in a business purchase?

A letter of intent, often called an LOI, outlines the basic terms of a proposed business purchase or sale. It may address purchase price, deal structure, financing, due diligence, confidentiality, exclusivity, closing timeline, and other key terms. Some LOI provisions may be binding even if the final purchase agreement has not been signed.

What is due diligence when buying a business?

Due diligence is the buyer’s investigation of the business before closing. It often includes reviewing financial statements, tax returns, contracts, leases, licenses, permits, employees, litigation, debt, intellectual property, operations, customers, vendors, and potential liabilities. Due diligence helps the buyer understand what they are purchasing and identify risks before completing the acquisition.

What is included in a business purchase agreement?

A business purchase agreement usually includes the purchase price, assets or equity being sold, liabilities being assumed or excluded, representations and warranties, covenants, indemnification rights, closing conditions, non-compete provisions, transition obligations, and closing deliverables. The agreement is the central legal document in many business sale transactions.

How are business acquisitions financed?

Business acquisitions may be financed through personal funds, seller financing, bank loans, SBA loans, investor capital, private equity, asset-based financing, or a combination of several sources. The financing structure can affect negotiation leverage, closing timeline, security interests, personal guarantees, and the final purchase agreement.

What role does a business broker play in selling a business?

A business broker may help market a business, locate potential buyers, coordinate information requests, and assist with negotiations. Sellers should understand the broker’s commission, listing agreement, conflicts of interest, valuation approach, and role in the transaction. A broker is not a substitute for legal or tax advice.

What legal issues come up after closing?

After closing, buyers and sellers may need to address transition services, employee handoff, customer and vendor notices, lease assignments, license transfers, contract updates, post-closing payments, indemnity claims, earnouts, and non-compete obligations. A well-drafted business sale agreement should explain each party’s post-closing responsibilities.

Before you buy or sell a business, understand the legal landscape.

Download the free guide from Massingill and get a straightforward overview of the issues that can shape your transaction.

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