WHAT I DO: I help entrepreneurs, solopreneurs, and small business owners protect their brands and businesses, allowing them to protect their business, grow their customer base, and do what they do best. . . run their business. 

HOW I DO IT: I do this by advising my clients on legal structuring, and tax planning and helping my clients form business entities to protect their assets. 

WHY IT WORKS: When a business owner forms their legal entity and has lawyer-approved contracts with their employees, contractors, and vendors, the business can operate with confidence and purpose. In turn, this positions the business as a legitimate company ready to serve its customer base. Separation of personal and business provides authority and legitimacy. 

WHO I WORK WITH: I’ve worked with businesses of all sizes, new start-ups, companies with 5-50 employees, and Fortune 1000 Corporations. I provide clear, actionable ideas using my relatable approach to business formations and tax planning.

READY TO TALK? Reach out to me directly here on LinkedIn or visit my website www.joshualowenthal.com

 Areas of Practice: Business Formations / Tax Controversy / Tax Planning / Tax Structuring / Corporate Governance / Mergers & Acquisitions 

Social Links
•	Website: www.joshualowenthal.com
•	X: www.x.com/joshualowenthal

Josh Lowenthal

The challenge that I come across when working with searchers is highlighting the risk associated with taxes. 

Most sellers have some issue with their business. They misclassified an employee, didn’t pay use tax, or (gasp) their S Corp election is invalid. 

As a buyer, the question that you need to be asking yourself isn’t whether or not these issues kill the deal. Instead ask yourself, “how likely is it that this issue will come up during the 18-24 months post close.”

Lawyer ⚖️ | 💰Tax Planning | 🚀M&A | Helping you build your business empire by acquiring your next SMB.

Lawyer | Helping entrepreneurs buy, grow, and sell main street businesses | Building a modern law firm at 7th Street Legal

I help acquisition entrepreneurs buy, grow, and sell small businesses.

In the past, you’ve had limited options. Large law firms cost too much money. Small town lawyers lack the experience. 

I founded 7th Street Legal to provide you with an alternative: Premium legal services, predictable pricing, a law firm designed for you.

Before founding 7th Street Legal, I worked in private practice, representing some of the biggest companies in the world. But equally important, I’ve spent years working exclusively with main street entrepreneurs.

Hal Stanton

Here's one rule I always advise you to follow.
It will save you money in the long-run.
 
Complete financial diligence first.
 
Why?
 
Businesses are usually valued at a multiple of EBITDA or SDE.
 
Financial diligence—in particular, a Quality of Earnings—is your first real opportunity to scrutinize EBITDA / SDE.

And if your QoE suggests that EBITDA / SDE should be revised down, you’ll have grounds to re-trade on purchase price.

But the seller, having already agreed to the purchase price in the LOI, may resist. And if so, the deal will fall apart.
 
Accordingly, you should avoid accruing meaningful legal fees until it looks like you're past this point. 

Efficiency favors financial diligence first.
 
Sometimes, in the rush to close, the buyer will start legal and financial workstreams at the same time.
 
The circumstances may force your hand and make this unavoidable. But whenever possible, try and avoid it. 

Rushing through QoE is rarely a good idea.

It's your first line of defense.

(This coming from a lawyer)

1. Follow me for more insights into main street M&A.
2. Reach out if you want to discuss working together.

#MergersAndAcquisitions #Entrepreneurship #Legal #Searcher #AcquisitionEntrepreneur #7thStreetLegal

And we’re back. 
Happy new year! Happy 2026!

I spent part of the holidays “up north.”

That’s what us Michiganders (even adopted Michiganders like me) call upstate Michigan.

It was snowy. Seriously snowy. Over a foot fell in the few days that we were there.

On the plus side, that led to great adventures with my son.

Snowmen were built.

Snowballs were thrown.

It may have been cold. But we had fun.

How did you spend your holidays?

Do asset purchases always insulate you from inherited liabilities?

Despite some blog posts to the contrary, the answer is: no, there are exceptions. 

And one such exception involves 𝗯𝘂𝗹𝗸 𝘀𝗮𝗹𝗲𝘀 𝗹𝗮𝘄𝘀.
 
Traditionally, these laws were designed to protect creditors in the event that a business sells its assets.

These laws required the business to notify its creditors of the proposed sale, giving the creditors a chance to take action.
 
The concern was that a nefarious business owner could transfer the assets of her business to a new legal entity in an attempt to avoid paying her creditors.
 
And, accordingly, the failure to notify creditors usually meant that the buyer would become liable for those debts as a successor in interest.
 
However, the traditional rule and rationale has become more complex.  

For example, in some states, bulk sales laws have little to do with creditors. Instead, the focus is on local taxes.
 
In those jurisdictions, the business has to obtain a certificate from the local taxing authorities stating that no taxes are owed. 

Otherwise, again, the buyer can become liable as a successor in interest.
 
What's more, some states have abolished their bulk sales laws. But not all.
 
And some states have abolished their bulk sale laws but retained the tax clearance requirement.

So, when purchasing a business, you need to understand what laws apply and what they demand from you in terms of compliance.
 
But don't worry. You don't have to memorize this post of go off and do a bunch of research.
 
Instead, you need to work with a lawyer who understands what laws apply and what actions you need to take to protect yourself. 

Something about traps for the unwary...

As always:

1. Follow me for more insights into main street M&A.
2. Reach out if you want to discuss working together.

#MergersAndAcquisitions #Entrepreneurship #Legal #Searcher #AcquisitionEntrepreneur #7thStreetLegal

I regularly speak with prospective buyers.
Here is one thing they often ask me:
 
Are you a problem solver?
 
I get where they are coming from.
 
Some lawyers are negative.
 
They see problems and stop there.
 
• You can’t invest in that company.
• You can’t close that deal.
• You can’t, you can’t, you can’t.
 
And, just to be clear, “you can’t” is sometimes sage advice.
 
Some problems are red flags. There are reasons to walk away.
 
But, truth be told, there are solutions to most issues. Transactions are, after all, negotiations. Nothing more.
 
Don’t surround yourself with the “No” Department.
 
Look for lawyers who see themselves as risk assessors.
 
Lawyers who want to make you aware of the risks and work out how best to mitigate them.
 
Lawyers focused on closing (not killing) the types of deal you want to do.
 
A little negativity can be a good thing, a lot not so much. 
 
1. Follow me for more insights into main street M&A.
2. Reach out if you want to discuss working together.

#MergersAndAcquisitions #Entrepreneurship #Legal #Searcher #AcquisitionEntrepreneur #7thStreetLegal

Some promote business buying as a path to wealth.
But here’s one thing you should know:
 
Buying a business involves risk.

A lot of risk.
 
You can do all the diligence you want. Small businesses are informal affairs. Hidden skeletons may still exist.
 
You can do a lot to protect yourself. You can allocate liabilities in the purchase agreement accordingly and have the seller indemnify you for related losses.
 
But these protections will only get you so far.
 
There is only so much your lawyer can do.
 
And if the worst happens and the business fails, you’re the one holding a personal guaranty on the SBA loan.
 
The fact is you have to have a certain risk appetite to pursue these deals.
 
The rewards are there.
 
But it’s not for everyone.
 
And that’s the truth.

As always:

1. Follow me for more insights into main street M&A.
2. Reach out if you want to discuss working together.

#MergersAndAcquisitions #Entrepreneurship #Legal #Searcher #AcquisitionEntrepreneur #7thStreetLegal

Non-competes are crucial in main street deals.
So let's bust some myths.

- Non-competes are hard to enforce. 
- I don't need one, as the seller is retiring.

Both are untrue.

A non-compete protects your new investment by preventing the seller from using industry knowledge and customer relationships to create a rival business.

They are enforceable so long as reasonable.

And even if the seller is retiring, you still need one.

Otherwise, the seller could assist a rival business (like a rival operated by his or her nephew).

Accordingly, negotiating a non-compete is one of the most important parts of the business buying process.

Because you don't want your newly acquired clients to have another option, particularly one that they know and trust.
 
Do not let the seller destroy the goodwill you’ve just purchased.

Non-competes are standard in main street M&A for a reason.
 
If a seller pushes back against a non-compete, it’s generally a red flag.

1. Follow me for more insights into main street M&A.
2. Reach out if you want to discuss working together.

#MergersAndAcquisitions #Entrepreneurship #Legal #Searcher #AcquisitionEntrepreneur #7thStreetLegal

All too often, I still see first-time buyers making this mistake.

As a result of last year's changes to SBA SOP 50 10, they believe that the SBA requires seller notes to be on standby for the full term of the SBA loan.
 
To clarify:

If you want the seller note to count towards your 10% equity injection, then yes, it has to be on full standby for the term of the loan (often 10 years).
 
But if you’re getting your equity injection from elsewhere (e.g., personal funds or investor capital), a seller note doesn’t have to be on standby at all.

That doesn't mean you don't want your seller note on standby. Seller notes are regularly on full or partial standby for the first two years to ease the transition from seller to buyer.

But don't spook the seller unnecessarily, as asking him or her to defer a portion of the purchase price for 10 years is a big ask.
 
1. Follow me for more insights into main street M&A.
2. Reach out if you want to discuss working together.

#MergersAndAcquisitions #Entrepreneurship #Legal #Searcher #AcquisitionEntrepreneur #7thStreetLegal

Every now and again, I see this issue.
Hopefully, I see it in time to intervene.

The buyer isn't proposing a meaningful seller note.

This is a mistake as seller notes play an important role in main street M&A.

Why?

It's about aligning economic incentives:
 
• The seller is more likely to see the note repaid if he or she ensures a successful transition of ownership.
• Negotiating an offset right gives you the means to deduct indemnified losses from the amount owed.
 
Seller notes are also a useful tool to bridge valuation gaps, particularly if a portion of the note is forgivable based on business performance (earnouts aren't permitted in SBA funded deals).

Seller notes have only increased in importance since last year; the SBA placed restrictions on sellers retaining equity.

Sellers now have to guarantee the SBA loan for two years when retaining equity, making this scenario less and less common.

In main street M&A, seller notes have always formed a part of the capital stack.
 
And seller notes will remain a crucial structuring tool.

Take heed.

1. Follow me for more insights into main street M&A.
2. Reach out if you want to discuss working together.

#MergersAndAcquisitions #Entrepreneurship #Legal #Searcher #AcquisitionEntrepreneur #7thStreetLegal

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The Battle

Josh Lowenthal

Hal Stanton

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The Battle

Josh Lowenthal

Hal Stanton

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Performance Score.css-goub6s{font-size:var(--chakra-fontSizes-md);font-weight:500;color:var(--chakra-colors-gray-600);display:block;margin-top:var(--chakra-space-1);}Josh Lowenthal's LinkedIn Performance

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