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Share Sales vs Business Sales (Part 1): The Differences Between a Share Sale and a Business Sale
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Key Insights
The transaction structure matters from the start. A share sale and a business sale are different transaction structures, and that difference can affect how the deal is approached. Buyers and sellers should understand the structure before negotiations progress too far, because it can influence the legal issues, documentation and risks involved.
Tax and liabilities can affect the preferred approach. The episode highlights tax and liabilities as key considerations when choosing between a share sale and a business sale. These issues can influence what each party is willing to accept and what needs to be addressed before the transaction proceeds.
Buyers and sellers should know what to expect. A sale transaction involves more than agreeing on price. The structure chosen can affect the process, the documents required and the issues that need to be worked through before completion. Understanding those differences early can help buyers and sellers approach the transaction more clearly.
Choosing between a share sale and a business sale can shape the way a transaction is structured, negotiated and completed.
In Part 1 of this Explain That series on Share Sales vs Business Sales, Andrew Henshaw is joined by Lauren Gross to discuss the key differences between a share sale and a business sale, and why the structure matters for both buyers and sellers.
The episode lays the groundwork for the series by explaining the legal differences between the two transaction types and the issues parties should consider before deciding how a sale should proceed. Andrew and Lauren discuss how structure can affect tax, liabilities and the steps involved throughout the transaction.
For buyers and sellers, understanding the difference between a share sale and a business sale is not just a technical issue. It can affect the risks being assumed, the matters that need to be negotiated, and what each party should expect as the transaction progresses.
This episode is a practical introduction for business owners, buyers, sellers and advisers considering a sale transaction and wanting to understand how transaction structure can affect the process.
For advice on share sales, business sales, transaction structure or sale documentation, contact Velocity Legal’s Commercial team.
This podcast in no way constitutes legal advice. It is general in nature and is the opinion of the author only. You should seek legal advice tailored to your individual circumstances before acting on anything related to this podcast.
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