The difference between acquiring a business via share purchase and assets comes down to this principle: when you acquire the assets, you don't incur the liabilities associated with the business. Purchasers prefer assets as this allows them to cherry pick, keeping what they want and leaving what they don't want. In a stock sale, whether common or preferred, involves acquisition of the entire corporation as is - prompting a rewrite of the Articles of Organization by incoming management to fit the new paradigm. This type of transaction is normally reserved for middle market to high net worth consortiums such as private equity firms.

Assuming a history of liabilities can make the due diligence process challenging and that's where we excel. We uncover ways to mitigate inherent risks through indemnification clauses and other various strategies. Commonly referred to as M&A in the business world, Merger and Acquisition is an exciting niche involving a whole host of flexible deal structures and different set of motivations for both buyers and sellers. Simply put, M&A is all about companies buying and selling each other. The owners of Company A are perhaps tired of the business and may or may not have a succession plan, motivating them to consider retirement through divestiture, equity cash outs etc.

Mergers are least common except among public companies and are often driven by complex tax considerations that tend to show up in massive deals. Ultimately, Company 1 comes together with Company 2 and one of them disappears by operation of law. Sellers of businesses or assets typically seek to be acquired because they want to take some chips off the table.

Maybe it doesn't look viable going forward or maybe they simply don't want to compete as competitors gain more market share in their respective industries. On the buyers side, decisions regarding growth must be made in a timely fashion. Some choose to pursue internal growth while others seek to purchase revenue from value-added propositions presented by prospective sellers.

Understanding numbers and logic are extremely important in our endeavors, but equally as important is knowing the inner workings of human nature and internal motivations that drive equity transfer. Business law, finance, and entrepreneurship are rife with a myriad of obstacles and pitfalls. Our job is to extract as much of the pain as we can, leaving you with peace of mind.