September 22, 2025
Buying or Selling a Business in Texas? Key Legal Considerations Before You Sign
The AOL–Time Warner merger was supposed to be a new era for American business—yet it became one of the most infamous deal disasters in history. From missed details in contracts to misaligned business goals, even billion-dollar deals can fall apart when legal risks go unchecked. Buying or selling a business in Texas is no small feat, and both buyers and sellers need trusted guidance from a top-rated business attorney in McAllen, TX before making it official.
Knowing the legal steps, financial risks, and practical requirements involved in these transactions can make all the difference. Here are the key legal considerations every Texas business buyer or seller should address:
Conducting Due Diligence
One of the most critical steps before signing any business sale agreement is thorough due diligence. This process means carefully examining all aspects of the business—financial records, contracts, employment obligations, assets, and outstanding debts. Texas buyers should request and scrutinize balance sheets, tax returns, vendor agreements, leases, licenses, and pending litigation records. Sellers, meanwhile, must ensure their disclosures are accurate and comprehensive to prevent post-closing disputes.
Failure to conduct proper due diligence can expose buyers to undisclosed debts, tax liabilities, or regulatory violations that become their responsibility after closing. Conversely, sellers who omit material facts may face lawsuits for misrepresentation. That’s why engaging business attorneys in McAllen to oversee your due diligence and disclosure process is essential. According to the Texas Business Organizations Code, both parties can negotiate contractual representations and warranties, but only a careful legal review ensures these are fair and enforceable.
For example, a careful due diligence review can uncover undisclosed liens or hidden liabilities, allowing buyers to avoid costly mistakes and negotiate more favorable terms. Results like these are possible when experienced business attorneys thoroughly examine every document and detail involved in the transaction.
Negotiating the Purchase Agreement
The sale of a business is typically formalized through a purchase agreement—a contract that details the terms, price, payment schedule, and contingencies. Buyers and sellers alike should seek advice from a lawyer in McAllen to draft, review, or negotiate these terms. Common deal structures in Texas include asset sales and stock sales, each with different legal and tax consequences. For instance, asset sales allow buyers to select specific assets and avoid certain liabilities, while stock sales often transfer all business obligations to the new owner.
Key provisions to address in the purchase agreement include:
- Purchase price adjustments based on final inventory or receivables.
- Indemnification clauses that protect against hidden claims.
- Non-compete and non-solicitation agreements to prevent the seller from competing or soliciting customers post-sale.
- Escrow provisions for holding funds pending post-closing adjustments.
Legal disputes frequently arise from ambiguous contract language or overlooked details. Utilizing a business attorney can help you negotiate and clarify every term, reducing the risk of future litigation.
Addressing Regulatory and Tax Compliance
Business sales in Texas often trigger a host of regulatory and tax obligations that can impact both buyers and sellers. Depending on the type of business, you may need to transfer licenses, secure industry-specific approvals, or notify regulatory agencies to ensure the transaction is legally recognized. Sectors such as healthcare, food and beverage, and franchising require particular attention to detailed state and local rules.
Tax issues are equally important—sales tax, capital gains tax, and the proper allocation of the purchase price all have significant financial implications. Overlooking requirements like notifying the Texas Comptroller of Public Accounts about the change in ownership can expose parties to unexpected successor liability for unpaid taxes. That’s why it’s essential to consult with business attorneys in McAllen, TX to help you satisfy every regulatory and tax requirement and keep your transaction on solid legal ground.
Make Your Move with Skilled Corporate Attorneys in Texas
The legal steps you take before signing a business sale or purchase agreement can determine your success or expose you to avoidable risks. Whether you’re selling a family business or acquiring a new opportunity, trust Villeda Law Group to guide you through every stage with clarity and confidence. With decades of experience and a commitment to clear communication, our team stands ready to protect your interests and secure your best outcome. Call Villeda Law Group or contact us today to schedule your business law consultation with a leading attorney.