Buying a Business

Buying a BusinessBuying a business can be a dangerous or expensive proposition.  Of course buying an existing business has many obvious advantages - loyal customers, trained employees, reliable suppliers, transition plan coordinate with seller and fully equipped premises.

 

If you're considering buying an existing business, there are a number of issues that must be decided immediately and they will have an impact on the transaction and even on the capital outlay and operating costs of the business.

 

The first thing that must be determined when you go to buy or sell a business is whether or not it will be done via an asset sale or a share sale. In other words, are you buying just the assets of the business or are you buying the shares of the company that owns the business? Generally speaking, it is to the buyer's advantage to buy assets while it is to the seller's advantage to sell shares. In an asset purchase, the buyer can pick and choose which assets are being sold and which obligations and liabilities are being assumed. In a share purchase, the purchaser is buying the shares of the company that owns the assets and assumes all liabilities and obligations unless otherwise negotiated.

 

Other factors that arise in a commerical purchase include how to structure the deal from a tax and accounting point of view which which require the advice of an accountant. 

 

If you are buying a business, Open Door Law Corporation will walk you through the process, and advise you of the scope of the transaction and its likely cost. We assist our clients through the negotiation process, including any lease negotiations and financing requirements, conducting the appropriate due dilgence for your transaction, working with your accountant and/or tax advisors to create the tax effeciencies or benefits when papering the transaction, negotiating the allocation of purchase price for potential tax advantagesas.

 

powered by: Xyfon Solutions