01329 822 333
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We are often told by clients that they have agreed to sell their business/buy a business, but when asked whether it’s a purchase/sale of the assets of the business or the acquisition sale of shares in the company they don’t know.
To briefly clarify if you buy the assets, you buy the goodwill, fixtures & fittings and property, but with a share sale you buy the shares. In other words “everything” in the company.
But which is better?
- With shares there may be some significant tax savings which should be considered with your accountant.
- With an asset purchase you only buy specific items so you know what you are getting.
- With shares you buy everything including the liabilities of the company so there is a greater risk (eg. debts).
- With assets you may need third party consent which can take time (eg. consent of a Landlord under a lease).
- With shares the company already has these in their name so no need to transfer.
- With assets you get a clean break from issues that may have arisen previously with the company (there are some exceptions – eg. employees).
- Share transactions are considerably more expensive to deal with as negotiations need to deal with outstanding liabilities.
When considering the sale or purchase of a company it is always recommended that before you agree a deal, the transaction is firstly discussed with your accountant and then with your legal adviser.
Whether you’re selling, purchasing or merging with another business, our mergers and acquisitions solicitors ensure the process runs smoothly and that your interests are secure. Call us on 01329 822 333
