Product Acquisition

[ruben.g]

I'm in talks right now to acquire a product. This is a SaaS (software as a service) product where users use the online app for a monthly fee.

They're currently doing business under a DBA and have their own merchant account. I'd like to use the merchant account I already have but will require a DBA by the same name.

So my question is, can I file for a DBA by the same name because I'm in a different state? Or would I somehow have to transfer ownership of their DBA? I'm not exactly sure how this would work. Thanks.

[rdc]

Ruben,

Is the company from which you are acquiring the product planning to continue doing business (under their current DBA name or otherwise) after you buy the product?

Or are you actually buying the company itself? You may need to consider corporate law and or securities issues (most likely the former and not the latter, depending upon the size and scope of the transaction).

Generally the owner of a DBA can "cancel" the DBA with the appropriate licensing body of the state/county/city. You should definitely be creating a contract for this acquisition, at a minimum (preferably by an attorney or with one's guidance), and it should include a provision that the DBA cancelation will take place.

You may also run into trademark issues if their DBA is also legally a trademark (indicating origin). If this is the case, you will need to look into and contract for trademark clearance and, potentially, assignment/licensing and/or indemnification of the trademark.

Regarding the DBA in the different state; yes, you may be able to concurrently use a DBA, but if they continue using the name, you could definitely run into a trademark issue and be sued later; this all needs to be negotiated and planned for.

There may likely be potential tax issues surrounding the acquisition; acquiring the product/company one way may incur more taxable income to you than other ways.

Lastly, if you are going to sell and operate this product via the web (which would be the case for SaaS), you will definitely need to consider legal planning at both a business and web level--contracts with your customers and other agreements--to cover the terms of use.

If I can be of further help, please don't hesitate to contact me. Good luck!