McArdle Franco Structures Business Acquisitions to Prevent Disputes

Coral Gables firm applies litigation experience to the front end of mergers, acquisitions, and sales of Florida businesses

CORAL GABLES, Fla. – October 20, 2026 – McArdle Franco PLLC is highlighting its transaction structuring practice for business owners, investors, and companies buying or selling businesses in South Florida. The Coral Gables firm, established in 2002, advises on deal structure, letters of intent, due diligence, purchase agreements, financing, and closing, with the goal of reducing litigation risk before a deal is signed.

Quick Answer: Well-structured business acquisitions start with the right deal form (asset purchase, stock or membership interest purchase, or merger), a letter of intent that settles key economic terms, focused due diligence, and a purchase agreement that clearly allocates risk through representations, indemnities, escrows, and purchase price mechanics. Florida-specific issues include successor liability for unpaid state taxes, lease and license assignments, and enforceable seller noncompetes. McArdle Franco, a Coral Gables M&A lawyer team, applies litigation experience to drafting so that terms hold up later.

An Active Market for Florida Businesses

South Florida’s business community includes thousands of founder-owned companies in construction, distribution, logistics, healthcare, hospitality, technology, professional services, and real estate services. Many owners who built those companies are approaching retirement. Private equity firms, family offices, strategic acquirers, and search fund investors are actively looking for acquisitions. Domestic and international buyers continue to move capital into the region.

These transactions create value when they are structured carefully and destroy value when they are not. Post-closing disputes over purchase price adjustments, earn-outs, indemnification, and noncompetes can consume a significant share of the price paid. McArdle Franco’s transaction structuring practice is built on a simple principle: the best time to prevent a dispute is when the deal is being written.

Consequential Thinking

McArdle Franco describes its approach as consequential thinking. Before agreeing to a term, the firm analyzes how that term could play out under different future scenarios, such as a decline in revenue, the departure of key employees, a dispute between new co-owners, or the discovery of an undisclosed liability. The firm’s litigators share their experience with the transactional team, identifying the provisions most likely to generate costly disputes. The firm works to remove uncertainty during negotiation and to make sure both sides understand the potential unintended consequences of proposed language.

Choosing the Deal Structure

Structure	Buyer Advantages	Seller Advantages
Asset purchase	Selects assets and liabilities; tax basis step-up	Retains entity; may be required for partial sales
Stock or membership interest purchase	Contracts and licenses usually stay in place	Clean exit; often capital gain treatment
Merger	Efficient for multiple owners; statutory process	Dissenters may have appraisal rights
Partial sale or recapitalization	Gains control or partnership with existing owner	Liquidity while keeping upside

Tax Considerations

Buyers often prefer asset purchases because they receive a stepped-up tax basis in the acquired assets, generating future depreciation and amortization deductions. Sellers often prefer equity sales because they generally produce capital gain treatment and avoid double tax for C corporations. Elections and reorganizations, such as Section 338(h)(10) elections or pre-closing F reorganizations for S corporations, can sometimes give the buyer asset-purchase tax treatment while preserving the efficiency of an equity sale. Tax structure should be settled before the letter of intent, because it affects price.

Liability Considerations

In an asset purchase, the buyer generally assumes only the liabilities it agrees to assume, though successor liability doctrines and certain statutes can create exceptions. In an equity purchase, the entity keeps all of its history. That makes due diligence and indemnification more important in equity deals.

The Letter of Intent

The letter of intent (LOI) sets the framework for the transaction. Although usually non-binding on economic terms, it creates expectations that are difficult to change later. Key LOI terms include:

• Purchase price and form of consideration, such as cash, seller note, rollover equity, or earn-out
• Deal structure and treatment of cash and debt
• Working capital target or the method for setting it
• Escrow or holdback amount and duration
• Key employment and consulting arrangements for the seller
• Exclusivity period and its length
• Due diligence scope and timeline
• Conditions to closing, such as financing, third-party consents, and licenses

Binding provisions, such as exclusivity, confidentiality, and expense allocation, should be clearly identified. A Miami business transaction attorney can help clients negotiate LOI terms that protect them as the deal progresses.

Due Diligence

Due diligence is the buyer’s opportunity to verify what it is buying. It also shapes the representations and indemnities in the purchase agreement.

Core Diligence Areas

Area	Typical Review
Financial	Quality of earnings, working capital trends, debt
Tax	Federal, state, and local filings; sales tax exposure
Contracts	Customer, supplier, and vendor agreements; change-of-control clauses
Real estate	Owned property, leases, assignment consents
Employment	Classification, wage and hour compliance, agreements
Litigation	Pending and threatened claims
Regulatory	Licenses, permits, industry-specific compliance
Intellectual property	Ownership, registrations, licenses
Data and cybersecurity	Privacy compliance, breach history
Insurance	Coverage, claims history, tail needs

Florida Successor Tax Liability

Section 213.758 of the Florida Statutes can make a buyer of a business personally liable for the seller’s unpaid Florida taxes, such as sales and use tax, if the buyer does not withhold enough of the purchase price to cover them or obtain the required certificate or receipt from the Florida Department of Revenue. Buyers of operating businesses in Florida should address this requirement before closing.

Consideration Structures

Cash at Closing

Cash at closing is the simplest structure but requires the buyer to finance the full price and gives the buyer the least post-closing protection.

Seller Financing

A seller note spreads payments over time, which can help a buyer finance the acquisition and give the seller interest income. Notes should be secured, and the agreement should address whether the buyer may offset indemnification claims against note payments.

Rollover Equity

Private equity buyers often ask sellers to roll over part of their proceeds into equity of the acquiring company. Rollover arrangements require careful attention to tax treatment, governance rights, minority protections, and exit rights.

Earn-Outs

Earn-outs tie part of the price to post-closing performance. They are useful when buyer and seller disagree on value, but they are a frequent source of litigation. Well-drafted earn-outs define the metric precisely, specify accounting principles, set operating covenants, and provide a clear dispute resolution process.

The Purchase Agreement

The definitive agreement allocates risk between buyer and seller. Key components include:

• Representations and warranties about the business, with disclosure schedules
• Covenants governing the period between signing and closing
• Closing conditions and termination rights
• Purchase price adjustment mechanics with a sample calculation
• Indemnification with baskets, caps, survival periods, and exclusive remedy provisions
• Escrow and holdback terms
• Restrictive covenants for sellers
• Dispute resolution provisions

Representations and Warranties Insurance

In many middle-market transactions, buyers purchase representations and warranties insurance, which allows them to recover losses from an insurer rather than relying solely on the seller’s indemnity. RWI can reduce escrow requirements and help sellers achieve a cleaner exit, but its terms, exclusions, and retention must be coordinated with the purchase agreement.

Seller Noncompetes

Under Section 542.335 of the Florida Statutes, restrictive covenants tied to the sale of a business are presumed reasonable if three years or less and presumed unreasonable if more than seven years. Courts may not consider individualized economic hardship to the seller. Covenants should be tailored to the business’s actual geographic market and line of business.

Third-Party Consents and Assignments

Customer contracts, supplier and vendor agreements, commercial leases, licenses, and permits may require consent to assignment or change of control. Failing to obtain them can cost the buyer the very relationships it is paying for. Landlord consent is especially important for businesses that operate from leased premises. A Florida real estate transaction attorney can coordinate lease assignments and estoppel certificates with the overall transaction.

Regulatory Filings

Larger transactions may require premerger notification under the Hart-Scott-Rodino Act if they exceed federal thresholds, which are adjusted annually. The federal antitrust agencies adopted a substantially revised HSR filing form that took effect in 2025, increasing the information required. Transactions involving foreign buyers may require CFIUS analysis. Regulated businesses, such as healthcare providers, contractors, financial services firms, and alcohol licensees, require licensing approvals or notifications.

Financing the Acquisition

Acquisition financing may include senior bank debt, SBA loans for smaller transactions, mezzanine debt, seller notes, and equity. Lenders require security interests, guaranties, and subordination agreements with seller lenders. Financing contingencies, commitment letters, and closing timelines should be coordinated with the purchase agreement. McArdle Franco represents both borrowers and lenders in financing transactions, providing insight into what each side requires.

Supplier, Vendor, and Customer Agreements

For many businesses, the value being acquired lies in its relationships with customers, suppliers, and vendors. Buyers should review whether key agreements are assignable, whether they contain exclusivity or most-favored-customer terms, and whether pricing is sustainable. Sellers preparing for a sale can increase value by putting informal relationships into written contracts with reasonable terms and assignment rights. After closing, the buyer may need new or amended supplier and vendor agreements that reflect its larger purchasing volume or different operating model. McArdle Franco drafts and negotiates supplier, vendor, and distribution agreements as part of its transaction structuring practice.

Preparing a Business for Sale

Sellers who prepare in advance typically achieve better prices and smoother closings. Preparation steps include cleaning up corporate records and cap tables, resolving pending disputes, documenting intellectual property ownership, confirming employee classifications, organizing contracts in a virtual data room, and obtaining a quality-of-earnings review. Addressing these issues before marketing the business reduces the leverage buyers gain from diligence findings.

Post-Closing Integration

The transaction does not end at closing. Integration planning should address employee transitions and benefits, customer and vendor communications, transition services from the seller, systems migration, and calendaring of post-closing obligations, such as purchase price adjustments, earn-out reporting, and escrow release dates.

The Value of a Litigation-Informed Approach

As a South Florida transaction structuring law firm with an active business litigation practice, McArdle Franco sees how purchase agreements are tested in disputes. That experience informs drafting choices:

• Defining accounting principles with examples rather than general references
• Attaching sample closing statements and earn-out calculations
• Writing clear claim notice procedures with specific content requirements
• Coordinating employment agreements with sale noncompetes
• Specifying which disputes go to an independent accountant and which go to arbitration or court
• Aligning non-reliance language with the parties’ actual expectations

Cross-Border Deals

Many South Florida acquisitions involve international buyers, sellers, or investors. Cross-border transactions raise additional issues, including currency, tax treaties, regulatory approvals, and international dispute resolution. A cross-border transaction lawyer Miami at McArdle Franco can integrate those considerations into the deal structure.

Frequently Asked Questions

Should I sell my business through an asset sale or a stock sale?

It depends on tax consequences, liabilities, and the transferability of contracts and licenses. Sellers often prefer stock sales and buyers often prefer asset sales, but elections and reorganizations can sometimes bridge the gap.

Is a letter of intent binding?

Usually the economic terms are non-binding, but provisions such as exclusivity, confidentiality, and expenses are often binding. The LOI should clearly state which provisions bind the parties.

Can a buyer be liable for the seller’s unpaid Florida sales tax?

Yes. Under Section 213.758, a buyer that fails to withhold sufficient funds or obtain the required certificate from the Florida Department of Revenue may become liable for the seller’s unpaid state taxes.

What is rollover equity?

It is a portion of the seller’s proceeds reinvested in the buyer or its parent company, allowing the seller to share in future growth. It requires careful tax and governance planning.

How long can a seller noncompete last in Florida?

Covenants tied to the sale of a business are presumed reasonable at three years or less and presumed unreasonable at more than seven years under Section 542.335.

Do I need representations and warranties insurance?

It is increasingly common in middle-market deals and can reduce escrow requirements, but it adds cost and requires coordination with the purchase agreement. Whether it makes sense depends on deal size and risk profile.

Key Takeaways

• Settle deal structure and tax treatment before signing the letter of intent.
• Due diligence drives the representations, indemnities, and price.
• Florida buyers must address successor liability for the seller’s state taxes.
• Earn-outs and rollover equity require precise drafting to avoid disputes.
• Litigation experience improves the durability of purchase agreements.

About McArdle Franco PLLC

McArdle Franco PLLC is a Coral Gables law firm established in 2002 that counsels and represents businesses throughout Florida, across the nation, and internationally in transaction structuring, business structuring, real estate, land development and construction, and business litigation. The firm’s attorneys bring decades of combined legal experience and business backgrounds to multi-million-dollar transactions, including real estate purchases and sales, construction and development contracts, financing, mergers and acquisitions, government procurement, joint ventures, supplier and vendor agreements, cross-border transactions, and public-private partnerships. The firm was named a Tier 2 firm in Miami for Litigation – Construction in the 2026 edition of Best Law Firms® and was ranked in Chambers USA 2025 for Litigation: General Commercial in Florida.

Contact McArdle Franco PLLC

Address: 255 Alhambra Circle, Suite 925, Coral Gables, FL 33134

Phone: (305) 442-2214

Website: mcardlefranco.com

This release provides general information and is not legal advice. Consult a qualified attorney about your specific situation.

Sources and Further Reading

1. Transfer of Business; Liability for Taxes, Section 213.758, Florida Statutes – Florida Legislature
2. Restraints of Trade or Commerce, Section 542.335, Florida Statutes – Florida Legislature
3. Florida Business Corporation Act, Chapter 607, Florida Statutes – Florida Legislature
4. Florida Revised Limited Liability Company Act, Chapter 605, Florida Statutes – Florida Legislature
5. Internal Revenue Code Sections 338(h)(10) and 368 – Internal Revenue Service
6. Premerger Notification and the Revised HSR Form (2025) – Federal Trade Commission
7. Committee on Foreign Investment in the United States – U.S. Department of the Treasury
8. SBA 7(a) Loan Program for Business Acquisitions – U.S. Small Business Administration
9. Transaction Structuring Practice – McArdle Franco PLLC
10. Best Law Firms 2026 and Chambers USA 2025 Rankings – McArdle Franco PLLC Press Release