Buying a Business

Starbucks’ purchase of Bay Bread, LLC made the headline this week in the San Francisco Chronicle.  In an effort to expand offerings in stores, Starbucks bought Bay Bread, LLC, a French-themed bakery specializing in homemade granola, flank steak sandwiches, and organic bread.

The transaction involved much more than Starbucks handing over a check for $100 million.  Purchasing an existing business is a complicated affair, requiring a prudent investor to closely examine the business’s financial status, customer base, ongoing contracts, policies, and practices.

Typically, a business is acquired via one of three types of transaction:  Asset purchase, stock purchase, or merger. The simplest method, asset purchase, is accomplished by buying the business’s assets, without taking on any of its liabilities.  In a stock purchase, the buyer takes control of a business, in essence stepping into the previous owner’s shoes. A merger is accomplished by combining two previously separate businesses into one.

One legal restriction to be aware of in Pennsylvania is that Pennsylvania bulk sales laws require that every corporation, joint-stock association, limited partnership, or company that sells or transfers 51 percent or more of any category of its assets must do so in compliance with bulk sales laws.

For more information about acquiring an existing business, or for help with other matters related to managing your business, the attorneys at the Scolieri Law Group, P.C. can help.  Located in western Pennsylvania, our attorneys are experienced in Pennsylvania business law and can take care of the details for you, including the formation of a legal business entity if needed.  Contact us today at (412) 765-0546 or via email at