Purchase & Sale of Assets

When buying or selling a business, there are two types of transaction  —  sale of the business as a whole (a “share sale”) or any or all of its parts (an “asset sale”).  When considering which of these two options you will choose, you need to consider tax implications, liability, corporate history, corporate finances and corporate obligation.

In a share sale, you sell all your corporate shares.  The assets owned by the business continue to be owned by the company and the company is owned by the buyer.  In an asset sale, your corporation sells its assets to the buyer and you continue to own the shares.  

Aside from real estate (land or buildings), your company may own a whole range of other types of business assets, including:

• Inventory
• Equipment, including vehicles
• Supplies
• Furniture and other fixtures
• Accounts receivable
• Shares
• Client lists
• Patents, trademarks or copyrights
• The company name
• The company’s reputation (referred to as “goodwill”)

Additionally, whenever selling a business, the matter of non-competition and confidentiality agreements is a critical factor to be considered.

Martinson & Harder will help you determine which of the two types of sale is best for your situation, which of your assets you want to sell and which you may want to retain for leasing back to the buyer or selling to someone else in the future, explore all tax strategy issues, and will navigate and negotiate through all the required processes to complete your deal.

At Martinson & Harder, those practicing in this field are:

Douglas S. Martinson

Daniel C. Harder