Knowledge Based Enterprises: The Playbook For Transferring Intangible Assets
Knowledge Based Enterprises: The Playbook For Transferring Intangible Assets
The following articles provide key aspects and issues associated with transferring intangible assets of Knowledge-Based Enterprises (KBEs).
1. Buying and Selling a Knowledge-Based Business - Overview of the Process
For a number of reasons, buying and selling a business presents many challenges. Even though each deal is unique, most transactions involve many of the same features and elements. A lot can happen in a transaction, from the initial discussions through the final closing. It is important that while both buyers and sellers remain flexible they also ensure the final deal accomplishes their key goals. Transactions involving knowledge-based businesses have additional nuances that must be addressed, to ensure both parties benefit from the transaction. This article discusses some of the special issues presented in these types of deals, involving transferring intangible assets.
2. Selling the Knowledge-Based Enterprise
This article provides a reasonably accurate overview of a deal flow for many transactions involving the sale of IP-based companies, professional services businesses, and other Knowledge-Based Enterprises (“KBE”). The purpose of this article is to present an overview of a fairly typical KBE sale transaction.
Before the owners of a Knowledge-Based Enterprise (“KBE”) can seriously consider a purchase offer, it is critical that they first conduct some internal investigation and “housekeeping” so that they can maximize their sale value and minimize any obstacles to a successful transaction. The purpose of this article is to discuss what a pre-sale review is, the reasons a pre-sale review is important, and several common areas that KBEs should address as part of their pre-sale review.
4. Selling the Knowledge-Based Enterprise - Finding Buyers
An important step in transferring a KBE is finding a willing purchaser for the business. The purpose of this article is to discuss different ways KBE’s find potential buyers.
Most aspects of negotiations for the sale of a Knowledge-Based Enterprise (“KBE”) primarily involve business strategy and financial considerations. However, input from legal counsel during the negotiation process is important to facilitate candid and meaningful discussions in a manner that protects valuable proprietary information. In addition, if negotiations are successful, the result will often be a written term sheet or “letter of intent” (“LOI”) outlining the key deal terms. Although the LOI is primarily intended as a guide to the creation of a purchase agreement and other deal documents, the parties should consider a few important legal issues before signing the LOI. The purpose of this article is to discuss some of the legal issues, documents and strategies involved in negotiations for the sale of a KBE.
Once a Knowledge-Based Enterprise (“KBE”) seller and a prospective buyer have agreed on the key elements of a transaction, the buyer will want to conduct a thorough review of the KBE. This will help to ensure the buyer is getting a good value for the purchase price and to identify any potential risks or liabilities. This process is referred to as “Due Diligence.” The purpose of this article is to provide an overview of the due diligence process in transferring intangible property and to describe the key elements, as well as discuss areas of special concern for KBEs.
Once a Knowledge-Based Enterprise (“KBE”) seller and a prospective buyer have agreed on the key elements of a transaction, and after (or more often, during) the due diligence process, legal counsel for the buyer and seller will begin drafting the Purchase Agreement, a definitive agreement governing all aspects of the transaction. The main focus of drafting definitive deal agreements for the transaction will be on the Purchase Agreement, but it could also include a number of additional documents related to the transaction. However, the type of ancillary agreements needed vary greatly from deal to deal, so this article concentrates on the primary focus agreement, except for a couple of the most common additional agreements involved in a KBE transaction.
Once a Knowledge-Based Enterprise (“KBE”) seller and a prospective buyer have completed due diligence and executed the Purchase Agreement and ancillary agreements, they are ready to consummate the KBE sale transaction, which is referred to as the “closing”. In this article, we discuss the final actions leading up to the closing, what happens at closing, and post-closing matters.
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Klemchuk PLLC is a leading intellectual property law firm focusing on litigation, anti-counterfeiting, trademarks, patents, and business law. We help clients protect innovation and increase market share through investments in IP.
This article has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please consult your attorneys in connection with any fact-specific situation under federal law and the applicable state or local laws that may impose additional obligations on you and your company. © 2023 Klemchuk PLLC