Q: A lady wants to buy my business for $1500/mo. For 60 mos. If she fails, how can I make sure I get my money? Collateral?
She may do great for a while but I need to make sure I get my money if she fails. What can I do? Should I even be considering this?
A:
You could require a security instrument or mortgage as part of the sale agreement.
If you go that route, the buyer must agree to put up some collateral (her home, vehicles, or her and/or the business' real estate, assets, or property) in case she misses or refuses to make a payment to you. This would enable you to take possession of the collateral and sell it in order to recover your money if she misses or fails to make a payment.
You should seek out a business attorney to advise you further and ideally represent you in this potential sale of your business.
A: You would need a recorded security interest in the assets of the Company and an agreement she can't pledge those assets as collateral or sell the business assets. also that she cannot sell her interest until the debt is paid This is assuming the business has hard assets worth enough to provide the collateral. You should also consider if the buyer has other collateral that could protect the amount. You should also require financial information on a monthly basis so that you can keep up with where things are. You may want to consider retaining a controlling interest in the entity but the buyer would operate. Upon full payment the remaining interest would transfer. You will likely need a lawyer to draw up the documents you need.
Zachary Scott Gainous and Anthony M. Avery agree with this answer
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
