If you are thinking of selling your small business, it is important to consider all possible scenarios before making any kind of decision. Billions of dollars change hands each year in the buying and selling of businesses, and these transactions are often very complex.
The first consideration when selling your business is what form you want the transaction to take. The most advantageous for the seller is the stock purchase. In a stock purchase, the buyer purchases most or all of the stock in a company, which gives them complete control, and usually total ownership, of the company. In addition to the assets of the company, like inventories, they assume all of the debts and responsibilities of the company as well. This assumption of debt is the reason why the stock purchase, or outright sale, is the most advantageous for the seller.
An asset purchase is less beneficial for the seller, as they do not get rid of any debt or liability. The buyer would just purchase some or all of the assets of the company without assuming any responsibility.
The choice to sell your business can be a difficult one. It is important to understand all of your options before entering into any agreement.
For more information about the various ways to sell your business, contact Texas Legal Entities today by calling (512) 472-2431.