When you are looking into buying or selling a business, there are really only two options:
- To buy or sell the assets of the business
- To buy or sell the shares of the company that run the business
The first is known as an asset sale; the second is a share sale. There are tax advantages to both.
1. Asset Sales
An asset sale is where you buy the assets of a business, such as furniture, equipment, accounts receivable, inventory and leasehold improvements.
2. Shares Sales
The second option is a share purchase/sell. If you have an incorporated company, you may wish to consider selling the shares of the business. The advantages of this option are numerous, but there are many pitfalls as well.
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