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Experienced Business Purchase Fraud Attorney Serving Phoenix, AZ
Purchasing a business in Arizona is a major investment. Even with inspections, accounts analysis, and business attorney contract reviews, you could still become a victim of business fraud. If you’re selling your business, you could do everything right to sell your business and still face fraud charges if a buyer makes false claims against you.
You need a knowledgeable business purchase fraud attorney in Phoenix, AZ, to guide you through business and commercial fraud charges after buying or selling a business in the Valley of the Sun. At Kadish Associates Law Group, we have over 30 years of experience in business, real estate, employment, and estate planning law. Contact us today for help with a business fraud case.
Identifying Business and Commercial Fraud
When a business seller and buyer agree to terms to transfer ownership of a business, fraud is possible under certain circumstances, including:
- One party makes a false representation and knows their statements to be false
- The party committing fraud does so to entice the other party into entering into the agreement
- The secondary party would not have entered into the agreement knowing certain statements were untruthful
- The secondary party suffers harm resulting from the fraudulent representations made by the party committing fraud
The seller must provide documentation that describes accurate earning potential, expenses, and debts. If the seller provides this information to the best of their knowledge and believes it to be accurate, they are not committing fraud. However, if the seller misrepresented the business’s earning potential, the buyer could file fraud charges.
At Kadish & Associates Law Group, we can help you navigate the business purchase process in Phoenix and identify pitfalls or red flags to help you avoid fraud.
Purchasing a Business in Phoenix: What You Need to Know
The seller is responsible for providing an accurate representation of the business, including current revenue, vendor contracts, and business expenses, as well as the current market placement among local competitors. As the buyer, you want to be able to understand current earning potential, as well as possible strengths, weaknesses, and opportunities to grow if you purchase the business.
A high-value business will require a buyer to gather and assess information from the seller more carefully. For example, mechanics who own their own shops may sell and go work for another shop rather than manage the demands of a shop themselves. If you purchase their shop, will their customers go to your new shop for service, or will they follow their mechanic to their new place of employment?
If the mechanic selling their shop knows that approximately 30% of their customers will follow them, they need to indicate this in their documentation as a factor that could influence earning potential. Then a prospective buyer knows that they will need to run advertising campaigns for re-opening under new ownership to generate new business.
Our legal team at Kadish & Associates Law Group can perform a thorough analysis to determine whether the seller’s representations were truthful.
What to Do When a Business Seller Commits Fraud
In many fraud cases, the buyer needs a business fraud attorney because the seller misrepresented some aspect of the business value and the buyer overpaid for their investment. Common instances of seller fraud include:
- Misrepresenting vendor contracts
- Accounting errors that overvalued the business income
- Misrepresenting client contracts
- Making the business appear more profitable
- Misrepresenting the value of business inventory
If you purchased a business and later found that the buyer intentionally or grossly misrepresented their business and commercial operations and income, contact our fraud attorneys to file fraud charges against the seller. Our firm has over 30 years of experience as a business purchase fraud attorney in Phoenix, helping clients recover damages against business sellers.
What to Do When a Business Buyer Makes False Claims with Fraud Charges
Sometimes a business buyer can’t maintain the success of an existing business after a purchase, or they fail to build the growth they hoped to see in their new business. Buyers who fail to generate a sizeable return on their investment may file charges of fraud against the seller.
If you sold a business and are now facing fraud charges, contact our business fraud law firm today. Even if you did not commit fraud, you need skilled legal representation to build a strong defense in your case.
Contact the Kadish Associates Law Group for Business Fraud in Phoenix, AZ
Whether you purchased a business under fraudulent claims by a seller or sold a business and are now facing fraud charges, turn to our experienced team at Kadish Associates Law Group. Call today at 480-967-2688 or contact us online to schedule a consultation with a business purchase fraud attorney in Phoenix, AZ.
What to do if your business is a victim of fraud?
If you purchased a business under false statements from a seller, contact a business fraud attorney with our firm immediately. Gather any documentation you have from the sale and your operations since owning the business that your attorney can use when building your case.
What is considered fraud in business?
Fraud is gross or intentional misrepresentation of business operations or performance to entice a party into an agreement. While it’s usually a seller who commits fraud to encourage the buyer to make an offer to buy, sometimes buyers misrepresent their experience running a similar business or are a competitor hoping to find out more about the business operations.
What is the best way to settle business disputes?
Never attempt to resolve a dispute without an attorney. Depending on the structure of your business, you could put personal assets or the business itself at risk in a lawsuit if you engage directly with the other party.
When buying a business from someone, what do you need?
Whenever you make a large investment, whether it’s buying property, stock, or business, you must complete your due diligence. Know what documentation the seller should offer and what information you can request. A seller won’t offer certain information until they verify that you are a legitimate buyer, not just browsing a new investment opportunity or a prospective competitor.