Buying or selling a business in Oklahoma can be an exciting opportunity—but it’s also a process filled with legal, financial, and practical risks. Whether you’re a first-time buyer or a seasoned entrepreneur looking to sell, understanding the steps involved and avoiding common pitfalls can help protect your interests and increase your chances of success.
Start With a Letter of Intent (LOI)
Before entering into a full purchase agreement, most business sales begin with a Letter of Intent. The LOI outlines the basic terms of the deal, such as:
- Proposed purchase price
- What assets or stock are being sold
- Target closing date
- Contingencies (such as financing or due diligence)
While usually non-binding, the LOI serves as a roadmap for negotiations and helps both sides stay on the same page.
Decide Between an Asset Sale and a Stock Sale
In Oklahoma, business deals typically take one of two forms:
- Asset Sale – The buyer purchases specific business assets (equipment, inventory, contracts, etc.) while the seller retains the legal entity and any liabilities. This structure is common for small businesses.
- Stock Sale – The buyer purchases the seller’s ownership interest in the company itself, taking over all assets and liabilities. This is more common in larger corporations or with well-established LLCs.
Each structure has pros and cons for both tax and liability purposes, so it’s important to consult with a knowledgeable attorney and CPA before choosing.
Use a Well-Drafted Purchase Agreement
Once both parties are satisfied, the next step is signing a Purchase and Sale Agreement. This document should clearly spell out:
- Purchase price and payment terms
- Included assets or stock
- Warranties and representations
- Any non-compete or transition obligations
- Closing conditions and timelines
- Dispute resolution procedures
A boilerplate or template agreement may not cover all the risks, especially in Oklahoma where certain disclosures and contractual terms are necessary under state law.
Handle Licenses, Permits, and Business Structure Changes
After the deal closes, the buyer may need to:
- Apply for new business licenses or permits
- Transfer or renegotiate the lease
- Obtain a new sales tax or employer identification number (EIN)
- Register with the Oklahoma Secretary of State if forming a new entity or changing owners
Sellers should cancel unnecessary registrations and make sure they’re no longer liable for payroll, taxes, or insurance going forward.
Plan for Taxes and Allocation of Purchase Price
The IRS requires both parties to allocate the purchase price among the assets sold, which affects how income and capital gains are taxed. Buyers and sellers should work with tax professionals to:
- Structure the sale in a tax-efficient way
- Avoid double taxation (especially for corporations)
- Understand depreciation rules and recapture obligations
Failing to plan for taxes can result in unexpected liabilities after the deal closes.
Claremore Business Attorneys
Whether you’re buying a franchise, selling a family-owned business, or acquiring a new location, our team can help guide you through each step of the process. For a free consultation with an attorney at Claremore Attorneys, call 918-379-4872. Or you can click here to ask a free online legal question.
