By Alex Lubyansky Managing Partner Last updated
Looking for a due diligence attorney texas? Acquisition Stars advises buyers and sellers on due diligence attorney matters across Texas.
Serving 1 market across Texas.
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Acquisition Stars represents clients in each of the following markets. Click any city to learn about acquisition due diligence law services in that area.
Houston's acquisition activity centers on energy and petrochemical service companies, healthcare practices tied to the Texas Medical Center complex, and the distribution and logistics operations that support the Port of Houston. SBA-financed buyers most often target established service businesses in the one million to five million dollar range: HVAC and mechanical contractors, medical and dental practices, distribution companies, and energy-services vendors with recurring commercial contracts. Most of these transactions close as asset purchases rather than stock sales, which shifts the due diligence focus toward contract assignability, equipment titles, and the target's outstanding liabilities rather than corporate governance history.
A due diligence review for a Houston purchase should confirm a Texas Comptroller tax clearance letter, since Texas Tax Code Section 111.020 lets the state pursue an asset buyer for the seller's unpaid franchise and sales tax if that step is skipped. UCC lien searches against the seller and its equipment are standard practice, along with confirming that any commercial lease can actually be assigned to the buyer on its current terms. Non-compete and key-employee agreements need separate review too: Texas requires a covenant to be ancillary to an otherwise enforceable agreement, and Texas courts reform rather than void an overbroad one, so an existing agreement is not automatically a dead end.
For a small to mid-sized Houston acquisition, a full-scope quality of earnings report is not always proportionate to the deal, and a diligence plan sized to the transaction matters as much as the findings themselves. Alex Lubyansky leads every Houston engagement, scoping the legal and financial diligence workstreams to the deal size and the buyer's SBA lender requirements before work begins, rather than running a single fixed process regardless of transaction size. That scoping conversation, along with a review of financial statements and any letter of intent already in hand, is exactly what a free consultation is built to cover.
Employee covenants in the target's contracts may be unenforceable in this state, which changes the workforce risk assessment.
Enforceable only if ancillary to an otherwise enforceable agreement. Mandatory reformation.
Unpaid state taxes follow the assets in many states, so state tax filings and clearance sit high in the diligence scope.
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, Texas gives each spouse sole management and disposition of the community property that spouse would have owned if single, and leaves the remaining community property to the joint management of both spouses unless they agree otherwise in writing, under Tex. Fam. Code 3.102. The no-income-tax environment significantly affects deal structuring.
Some acquisitions require notifying the FTC and the Department of Justice before closing under the Hart-Scott-Rodino Act's premerger notification program, which applies above an annually adjusted size-of-transaction threshold. Diligence should confirm early in the process whether a deal falls above that threshold, because the required waiting period directly affects the closing calendar.
Sources: 15 U.S.C. 18a(a)
Employment diligence should flag whether the transaction, or a workforce change the buyer plans after closing, could trigger advance notice requirements under the WARN Act for a qualifying plant closing or mass layoff. The notice obligation runs on a calendar the deal timeline has to accommodate, not the other way around.
Sources: Worker Adjustment and Retraining Notification (WARN) Act
Acquisition Stars handles M&A transactions for Texas clients and works with securities counsel on securities matters. Alex Lubyansky leads every M&A engagement.
We size the legal diligence workstream to the transaction. A single-location Houston service business does not need enterprise-level review, so an SBA-financed buyer is not paying for diligence built for a much larger deal.
We confirm whether a Texas Comptroller tax clearance letter is required before closing, since Texas Tax Code Section 111.020 lets the state pursue an asset buyer for the seller's unpaid franchise and sales tax if that step is skipped.
We run UCC lien searches against the seller and confirm the commercial lease can actually be assigned to the buyer on its current terms, before either issue becomes a closing-table surprise.
We coordinate legal diligence with what the buyer's SBA lender will independently require, so the two reviews move on the same timeline. A free consultation is where that coordination starts. Request an engagement assessment to scope a specific Houston transaction.
Cost tracks the scope of the review, not a single quoted number. A single-location business with clean financial records costs less to review than a multi-location target with SBA financing, an earnout, or a lease that needs assignment. Houston engagements are typically scoped in phases, starting with a review of the letter of intent and financial statements before the full diligence workstream begins. Request an engagement assessment for a figure specific to the target business.
A due diligence attorney reviews the legal side of a target business alongside the buyer's financial and operational review: corporate records, material contracts, outstanding liabilities, UCC liens, lease assignability, and any pending or threatened litigation. In Houston specifically, that review also confirms whether a Texas Comptroller tax clearance letter is needed before closing, since an asset buyer who skips it can inherit the seller's unpaid state tax liability. The findings feed directly into the purchase agreement's terms.
Common red flags include customer concentration not disclosed in the letter of intent, a working capital target that does not match the seller's actual cash cycle, unresolved UCC liens against business assets, a commercial lease the landlord will not agree to assign, and non-compete agreements that turn out to be unenforceable under Texas's ancillary-agreement requirement. None of these are automatic deal-killers, but each one changes the deal's structure, price, or timeline if it surfaces late instead of during diligence.
Yes. An SBA lender runs its own underwriting review alongside the buyer's diligence, and the lender's requirements, particularly around the seller's financial history and lease terms, often set the pace for the transaction. Coordinating legal due diligence with what the SBA lender will independently require keeps a Houston SBA-financed purchase from stalling in underwriting after the letter of intent is already signed.
Alex Lubyansky leads every acquisition due diligence law engagement, with an associate supporting the work.
M&A counsel since 2013. Nationwide practice. LOI through closing.
We review every transaction inquiry within one business day.
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
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