Austin sellers hear the same three words from everyone: no state income tax. That's true and it's useful, but it's also the least interesting fact about a Texas business sale. What decides your outcome is whether the Texas margin tax creates entity-level friction, whether your technology IP reps can survive buyer diligence, and whether the buyer is an out-of-state PE firm running a template you haven't seen. Our managing partner handles Austin sell-side engagements directly. Submit the transaction details.
A structured, methodical approach to business sale transaction law
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Transaction Assessment
We review the proposed deal, understand your objectives (whether buying or selling), and develop a legal strategy tailored to your specific transaction and timeline.
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Deal Structuring
We structure the transaction to optimize risk allocation, tax treatment, and operational continuity, whether as an asset purchase, stock purchase, or membership interest transfer.
3
Due Diligence
Managing Partner Alex Lubyansky oversees legal due diligence, identifying risks and opportunities that directly inform the purchase agreement and deal terms.
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Agreement Negotiation
We draft or negotiate the purchase agreement and all ancillary documents, ensuring every term reflects your interests and addresses the specific risks in your deal.
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Closing Coordination
We manage the closing checklist, coordinate with lenders, brokers, and opposing counsel, and ensure all conditions are met for a timely and clean closing.
We don't take every matter. Here is what happens when you reach out.
1
Personal Review (Within 24 Hours)
Alex reviews your transaction details. Your submission is not screened by an intake coordinator before it reaches him.
2
Fit Assessment
We evaluate whether your deal aligns with our practice. Not every matter is a fit, and we will tell you directly if it is not.
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Initial Conversation
If there is alignment, Alex schedules a direct call to discuss your transaction, timeline, and objectives.
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Clear Engagement Terms
Before any work begins, you receive a written engagement letter with defined scope, timeline, and fee structure. No surprises.
Request Your Austin Engagement Assessment
Alex Lubyansky leads every business sale transaction law engagement, with an associate supporting the work.
15+ years of M&A experience. Nationwide. LOI through closing.
Request Engagement Assessment
Alex reviews each inquiry. If there is alignment, you will hear back within one business day.
Submission Received
Your transaction details are under review. If there is alignment, we will be in touch.
Meanwhile, feel free to call us directly at (248) 266-2790
Frequently Asked Questions
Common questions from Austin clients
Does Texas margin tax affect the sale of my business?
The Texas margin tax (franchise tax) applies at the entity level, and buyer counsel will ask how tax accrued through the closing date is handled. Clean treatment in the purchase agreement, typically with a true-up mechanism and clear allocation of pre-closing and post-closing liability, avoids disputes. Some sellers restructure their entity before sale to improve the tax picture.
What IP diligence should I expect when selling a software business?
Buyers will audit your invention assignment agreements for every employee and contractor, review open source usage for GPL and similar contaminating licenses, verify customer data rights, and check for any third-party IP claims or notices. If any of these have gaps, they become rep exceptions, indemnity holdbacks, or in extreme cases reasons for a buyer to walk. Fix them before you go to market.
How are non-competes handled in a Texas business sale?
Texas Business and Commerce Code governs non-competes, and covenants tied to a business sale are generally enforced if reasonable in time, geography, and scope of activity. The statutory framework is more seller-friendly than some states, but buyers will still push for broad language. Negotiate carveouts for passive investment and non-competing ventures at the LOI stage.
What does a business sale attorney do?
A business sale attorney handles the legal side of buying or selling a business. This includes structuring the deal, conducting or managing due diligence, drafting and negotiating the purchase agreement, and coordinating the closing. At Acquisition Stars, Managing Partner Alex Lubyansky leads every transaction.
Do I need an attorney for a small business sale?
Yes. Even straightforward business sales involve purchase agreements, liability allocation, non-compete terms, and closing mechanics that carry real legal risk. The cost of experienced counsel is small compared to the cost of a poorly structured deal or a post-closing dispute that could have been prevented.
How much does a business sale attorney cost?
Legal fees for a business sale scale with the size and complexity of the transaction rather than following a fixed fee schedule. A larger transaction, with more negotiation, due diligence, and structuring work, carries a proportionately larger fee. Acquisition Stars reviews your transaction and discusses fee structure during the initial engagement assessment, before any work begins.
Can you represent both the buyer and the seller?
No. Representing both sides in the same transaction creates a conflict of interest. We represent one party, either the buyer or the seller, and advocate exclusively for that client's interests throughout the deal.
How is Acquisition Stars different from a general business lawyer?
Our practice is focused exclusively on M&A transactions. Managing Partner Alex Lubyansky brings 15+ years of deal experience, which means we have seen and solved the issues that general practice attorneys encounter for the first time. You get specialized M&A counsel with the personal responsiveness of a boutique firm.
How long does it take to sell a business?
From a signed letter of intent to closing, most business sales take 60 to 120 days. The full process, including preparation, marketing, and finding a buyer, can take 6 to 12 months. Acquisition Stars keeps the legal workstream moving at the speed your deal requires, so legal review is never the reason for delay.
Asset sale or stock sale: which is better for a seller?
Most small and mid-size business sales are structured as asset sales, which let a buyer avoid inheriting unknown liabilities and often close faster. A stock sale transfers the entire entity, including its contracts and licenses, and can carry tax advantages for a seller depending on structure and basis. The right choice depends on your entity type, liabilities, and tax position, so we review this early in the engagement.
What happens to my employees when I sell the business?
In an asset sale, the buyer typically makes new offers of employment to some or all employees rather than automatically assuming existing employment agreements. In a stock sale, employees generally continue under the company as before, since the legal entity itself does not change hands. We review employment agreements, benefit plans, and any change-in-control provisions as part of the sale to avoid surprises at closing.
What is an earnout or seller note, and should I agree to one?
An earnout ties part of the purchase price to the business hitting agreed performance targets after closing. A seller note has the buyer pay part of the price over time, with the seller acting as a lender. Both shift risk back to the seller and require careful negotiation of the metrics, payment terms, and default remedies. We negotiate these terms to protect your right to be paid in full.
How do I protect myself from claims after the sale closes?
Post-closing liability is managed through negotiation of representations and warranties, indemnification caps, basket thresholds, survival periods, and escrow amounts. We negotiate each of these terms on your behalf to limit your exposure after the sale closes, whether you are selling directly to a buyer or through a broker-managed process.
How do Texas non-compete laws affect business sale transaction law transactions?
Enforceable only if ancillary to or part of an otherwise enforceable agreement under the Texas Business & Commerce Code Section 15.50-15.52 (Covenants Not to Compete Act). The covenant must contain limitations as to time, geography, and scope that are reasonable and do not impose a greater restraint than necessary. Texas courts must reform (not void) overbroad covenants to make them enforceable. The "ancillary to an otherwise enforceable agreement" requirement typically means the non-compete must be connected to consideration such as stock options, proprietary information access, or a sale of business.
What are the Texas tax considerations for selling a business?
Texas has no corporate income tax and no personal income tax. The state imposes a Franchise (Margin) Tax on entities with total revenue exceeding $2.47 million (2024 threshold), at rates of 0.375% (retail/wholesale) or 0.75% (other). As a community property state, spousal consent is required for transfers of community property business assets. The no-income-tax environment significantly affects deal structuring.
Does Texas have a bulk sales law that affects business acquisitions?
Texas has repealed UCC Article 6 (Bulk Sales). However, Texas Tax Code Section 111.020 permits the Comptroller to impose successor liability on asset purchasers for the seller's unpaid franchise (margin) tax and sales tax. Buyers must request a tax clearance certificate before closing.
What can I expect during an initial consultation in Austin?
During your confidential initial consultation in Austin, we'll discuss your business sale transaction law needs, review your current situation, assess potential challenges specific to Texas, and outline a clear path forward. We'll explain our process, answer your questions, and determine if we're the right fit for your needs.
Do you work with companies outside of Austin?
Yes, we represent clients nationwide while maintaining a strong presence in Austin. Our managing partner handles business sale transaction law matters across all 50 states, coordinating with local counsel where state-specific requirements apply.
Need Specific Guidance?
Submit your transaction details for a preliminary assessment by our managing partner
Austin has evolved from a mid-tier tech market into one of the nation's hottest M&A environments, fueled by the Tesla, Oracle, and Samsung presences and a thriving startup ecosystem. The city leads in SaaS, semiconductor, and clean energy acquisitions. Dell Technologies' headquarter presence creates a massive supplier and partner ecosystem of acquisition targets.
Top M&A Sectors in Austin
SaaS & Software
Semiconductors
Clean Energy
Healthcare Technology
Consumer Products
Deal Environment
Austin's rapid growth has created intense competition for quality targets, with valuations rising faster than in other Texas metros. Many founders are younger and less experienced with exits, creating opportunities for buyers who can educate on deal process.
Why Acquire in Austin
Austin's population has grown over 30% in a decade, and its concentration of engineering talent (UT Austin produces 10,000+ STEM graduates annually) makes it easier to scale acquired technology businesses.
Texas Legal Considerations
Texas's franchise (margin) tax applies to businesses with revenue exceeding $2.47 million and can create unexpected tax liability during ownership transitions - proper entity structuring during the acquisition is essential.
Austin M&A Market Insight
Texas has no state income tax at the individual level, but the margin tax (franchise tax) applies at the entity level, and it surfaces in purchase price allocation, working capital true-ups, and post-closing tax returns. Buyer counsel will ask how the margin tax liability is handled through the closing date, and a clean answer keeps money in the seller's pocket. The defining Austin dynamic, though, is technology. The city's software, SaaS, semiconductor, and medical device ecosystems drive deal flow, and buyers in these sectors push aggressive IP reps. Chain-of-title on every line of code, open source license compliance, employee invention assignment agreements, and customer data rights all surface in diligence. Sellers who haven't papered their IP correctly over the years discover the problem when a buyer's counsel asks for the documentation. The other Austin-specific dynamic is out-of-state buyers. Much of the PE and strategic capital flowing into Austin comes from the coasts, and those buyers negotiate from national templates.
Common Deal Scenarios in Austin
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SaaS Business Sale with IP Chain-of-Title Diligence
Software buyers run exhaustive diligence on IP ownership: employee invention assignments for every engineer, contractor IP assignments for every outside developer, open source license compliance, and customer data ownership terms. Gaps in this chain create rep exceptions, indemnity escrows, and sometimes deal-killing issues. Getting IP documentation straight before the data room opens is one of the highest-leverage pre-sale activities a software seller can undertake.
2
Semiconductor or Hardware Business Sale
Hardware businesses face diligence on export control compliance (EAR, ITAR), patent portfolio strength, component supply chain documentation, and customer contract assignability. Texas-based sellers often supply regulated customers whose contracts have strict change-of-control and flow-down compliance provisions, and those provisions can become leverage points in negotiation.
3
Founder-Led Services Business Sale to Out-of-State PE
PE acquirers flying into Austin bring national playbooks: standard earnout structures, standard rep packages, standard indemnity caps. Sellers who negotiate from a Texas-specific position (margin tax treatment, non-compete under Texas law, Texas choice of law for disputes) often secure more favorable terms than sellers who accept the buyer's template wholesale.
Why Austin for M&A
Austin is one of the most concentrated technology M&A markets in the country, driven by SaaS, semiconductors, medical devices, and a growing middle market services sector. Sellers who arrive with clean IP, proper margin tax planning, and a negotiated position against out-of-state buyer templates close deals at or above LOI pricing. Sellers who don't lose value to diligence findings and template concessions.
Texas Legal Considerations for Business Sale Transaction Law
Non-Compete Laws
Enforceable only if ancillary to an otherwise enforceable agreement. Mandatory reformation.
Filing Requirements
Entity mergers and conversions must be filed with the Texas Secretary of State. Franchise tax (margin tax) compliance is required. The Comptroller's office handles tax clearance certificates for asset purchases. Public Information Reports are required annually.
Key Texas Considerations
Texas has no corporate or personal income tax, making it one of the most favorable jurisdictions for structuring acquisitions, though the Franchise (Margin) Tax still applies as a gross-receipts-based tax
As a community property state, spousal consent is required for the sale of community property business interests, adding a required step in deal documentation
Texas's unique requirement that non-competes be "ancillary to an otherwise enforceable agreement" means buyers must carefully evaluate the enforceability of each non-compete in a target company's portfolio based on the underlying consideration
Texas Bar Authority
State Bar of Texas (mandatory unified bar). Unified/integrated bar. Membership required to practice law in Texas.
Federal districts: N.D. Tex., S.D. Tex., E.D. Tex., W.D. Tex.
Business court: Texas Business Court (established 2024) Established by HB 19 signed in 2023; became operational September 1, 2024. Eleven divisions statewide, five divisions initially open. Concurrent jurisdiction with district courts in matters over $5 million including corporate governance, shareholder disputes, fiduciary claims, and state or federal securities law. The Fifteenth Court of Appeals serves as the dedicated appellate court, making Texas the first state with a dedicated business court appellate track.
Source: Texas Business Court
Texas M&A Market Context
Texas is the second-largest U.S. M&A market, with Houston (energy), Dallas-Fort Worth (technology, financial services), and San Antonio as major deal-flow centers across all industry verticals.
Recent Texas Legislative Changes (2024-2025)
Texas Business Court Established (HB 19). Governor Abbott signed HB 19 in 2023, creating the Texas Business Court as a new trial-level court with concurrent jurisdiction over complex commercial and corporate matters with amounts in controversy exceeding $5 million. The court began accepting cases September 1, 2024, with five of eleven planned divisions initially operational. Texas also created the Fifteenth Court of Appeals as the first dedicated business court appellate track in the U.S.
Source (accessed 2026-04-27)
Watchpoints
Common Austin Business Sale Transaction Law Pitfalls
These are the items we see derail business sale transaction law transactions in the Austin market. Each one is rooted in current statutory law, recent legislative changes, or recurring patterns from the deals Alex has handled.
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Recent Texas statutory change buyers and sellers miss
State statute
Governor Abbott signed HB 19 in 2023, creating the Texas Business Court as a new trial-level court with concurrent jurisdiction over complex commercial and corporate matters with amounts in controversy exceeding $5 million. The court began accepting cases September 1, 2024, with five of eleven planned divisions initially operational. Texas also created the Fifteenth Court of Appeals as the first dedicated business court appellate track in the U.S.
Texas non-compete enforcement and earn-out exposure
State legal framework
Enforceable only if ancillary to an otherwise enforceable agreement. Mandatory reformation.
"When the other side returns a redlined definitive, you don't need to be an attorney to scan the document and see whether it's signal or noise. If the entire document is now red, you can see it visually. The quick scan is whether these are actually important points or whether this is grammatical nitpicking for the sake of grammatical nitpicking. The latter is a pretty big red flag pretty quickly. In a good transaction, the redlining focuses on risk allocation, earnouts, exclusivity. The structural points that matter to the client on either side. That's fair. That's fine. When you see the same point reraised three rounds later, you have to ask whether that's a memory problem or just another way to keep the meter running. Sometimes I wonder if the firms are working together to make sure it goes back and forth. I'm not part of that."
3
Texas regulatory framework attorneys flag at LOI
State statute
Securities regulated by Texas State Securities Board (ssb.texas.gov). Texas follows the Texas Securities Act (Tex. Gov't Code Title 12); Blue Sky notice filings required for Reg D. Texas enforces non-competes only if part of an otherwise enforceable agreement and supported by adequate consideration (Tex. Bus. Com. Code sec. 15.50).
Guides and Resources
In-depth guides to help you prepare for your transaction
Alex Lubyansky leads every engagement, with an associate supporting the work. Tell us about your transaction and we will let you know if there is a fit.
