Buying or Selling a Business

Guidance for Buying and Selling a Business

Whether you are purchasing a local corner store or a large, established company, before you are committed, you’ll need to know the legal issues concerning the transaction. We can advise on the preferred form of agreements, tax implications, required licenses, and business registrations.

Asset vs. Share Purchase

When you buy a business, you usually have to decide whether you are buying assets or shares (assuming, of course, that the business is incorporated). There are very different considerations involved in each. When you buy assets, you receive only what you negotiate and pay for. If an asset is not included on the list of assets that you are buying, you will not receive it. If, however, you are buying the shares in the company that runs the business, you are acquiring the company itself. This means that all of its assets and liabilities will become yours. Tax and financing considerations arise from both of these options. You should discuss them with your professional advisors before agreeing on the deal’s structure.

Tax Implications

The structure of a business purchase or sale has significant tax consequences. Proper planning ensures you benefit from available tax advantages and minimize tax burdens.

Required Licenses

We ensure all necessary licenses and business registrations are properly addressed, including business name registrations with the Registry of Joint Stock Companies.

Financing Considerations

Securing financing can be a challenging process that requires considerable effort. While there are many sources of financing for business activities, accessing them can often be challenging. Financing may come from friends and family, either as loans or as equity (i.e., the investor receives a stake or ownership interest in the business). It may also include loans from third-party lenders, such as banks and credit unions, grants, and investments from third parties.