What is the difference between a stock purchase and an asset purchase? Which is the best strategy for your unique situation?
There are primarily two ways to purchase part or all of a company or competitor: a “stock purchase” and an “asset purchase.” An asset purchase allows you to selectively purchase the fixed assets or goodwill of another company without assuming any contingent liabilities or unrelated corporate debt. This is a great strategy for purchasing additional vehicles for your fleet, manufacturing capacity, inventory or even customers.
There are simply times when you need to purchase the whole company. One example is if you are attempting to acquire a company with government contracts, or if you wish to take ownership of specific intellectual property held in the name of the business. In these cases, a stock purchase allows you to buy the entire company, including all of its assets, customers, employees, debts, goodwill, intellectual property and (of greatest concern) contingent liabilities.
These transactions require extensive legal, accounting and tax expertise. The asset purchase or stock purchase agreements must be carefully structured to protect your interests while ensuring that you receive the full benefit of the assets or company you wish to acquire. The professionals at Allen Barron are uniquely positioned to support your efforts in a merger or acquisition. We have the accounting experts necessary to review the books and dig into the target company’s accounts and receivables.
Allen Barron’s business advisors and consultants can review supply and distribution channels, business fundamentals, and existing personnel and policies and provide sound insight into how to incorporate these into your own organization and corporate culture.
Our deeply experienced tax and business attorneys can help you to structure the transaction in a manner that best facilitates your strategy, while reducing tax implications and legal issues or contingent liabilities down the road.
We invite you to learn more about the integrated tax, legal, accounting and business consulting services of Allen Barron and contact us or call today to schedule a free consultation at 866-631-3470.
