Don’t Let Your Business Sale or Purchase Fall Through Because of Structuring Issues
Business sales are complicated transactions that require some give and take from all parties involved. There are plenty of twists and turns to a sale that threaten to stop the deal short of completion. Sellers and buyers of a business ultimately want the same thing, a completed deal that is mutually beneficial. What exactly that looks like is different to each side, but unless some common ground can be found the deal will never be settled. Don’t let your business sale or purchase fall through because of structuring issues, understand why the other side is asking for what they’re asking for.
Sellers are usually more willing to sell the stock or membership interest in a business than to sell it outright. Selling stock or membership interest allows sellers to obtain long-term capital gains on the sales proceeds. While this is a safe sale for the sellers, it carries more risk to a buyer.
Instead of purchasing stock or membership interest, buyers generally prefer to purchase the assets of the business in order to avoid the liability issues associated with stock. The issue is that buyers could be held accountable for transactions completed before the sale of the business if they buy stock or membership interests.
Contact The Law Offices of Kirk Halpin & Associates, P.A. Today
Practicing together in Howard County since 2004 – first in Columbia and now in Clarksville, The Law Offices of Kirk Halpin & Associates, P.A., is here to help with a variety of business, real estate and finance law issues. We have a long list of practice areas, a long list of industries served, and a long list of success stories and recommendations in helping businesses, no matter the size, grow, reach their goals, and surpass them. If you’re seeking counsel on a business, real estate or finance law issue, always feel free to contact us via our contact page or call us at (410) 531-1700. While you are here, remember to follow us on Facebook, Twitter,Google+, and LinkedIn to stay up to date with our blog and the latest happenings at our firm.