What To Consider When Buying or Selling a Business

What To Consider When Buying or Selling a Business

Mehmet Duzgun, Commercial Solicitor at Kerseys Solicitors LLP explains the options of purchasing or selling a business for you to consider.

Before purchasing or selling a business it is important to remember that there are two main ways this can be achieved, a share sale or an asset sale.

Share Sale

If you buy a business through a share sale and purchase route then the only asset that changes hands is the shares in the target company.

You as the buyer will acquire the target company with all its assets and liabilities and, so far as the outside world is concerned, nothing will have changed.

Whilst in theory a share sale may seem straightforward there is usually extensive due diligence carried out to consider any liabilities that will come with the company being purchased.

Asset Sale

Whereas buying a business through an asset purchase route, you have the ability to leave any liability with the seller from which the assets are purchased. There are some liabilities you will have to assume from the seller in relation to employees and TUPE regulations.

It is important to remember here if you purchase the business as a going concern by an asset sale then all the individual assets of the business will be transferred to you together with the goodwill of the business in order for you to carry on the business in succession to the seller.

Which structure is appropriate for me?

This will be a matter for the parties to decide, however generally the parties decide based on the advice of accountants and tax specialists.

If you are looking to sell or purchase a business or even start up a new business, and are looking for a specialist qualified lawyer, I will be happy to speak with you.

Please contact me at Kerseys Solicitors, Ipswich 01473 213311 or Colchester 01206 584584 or email me at [email protected].