Legal Issues in an Acquisition

Legal Issues in an Acquisition

November 7, 2023 by investor

Legal issues in an acquisition

There are several legal issues involved in selling your business. 

Here is a list of key areas to review:

Liability — the buyer assumes the liabilities of the acquired.

This includes any outstanding litigation as well as compliance issues.

Intellectual property — the buyer will look for what has been filed, when, and what is the current status.

Make sure your documents and filings are in order. 

Escrow for liabilities — the buyer may want to hold some of the funds in escrow for potential liabilities that may come in the first year.

Review your outstanding liabilities and working capital requirements.

Contracts — the legal team will want to review all contracts to understand what responsibilities the acquired has.

Make sure all contracts are organized for review.

Investor agreements — the legal team will review all investment documents to understand what legal requirements must be met.

Non-compete and non-disclosure agreements — the buyer will require the founding team to sign non-compete and nondisclosure agreements to protect the business from additional competition.

Have your legal team review these areas before an acquisition.


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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.