There are generally two methods available when acquiring a business: an Asset Purchase or a Share Purchase. Each has specific implications you need to understand before proceeding.
In an asset purchase, you are buying the business assets from the owner, which may include fixed assets, stock, goodwill, and intellectual property. This does not include the business entity itself, which means you generally do not inherit liabilities unless specified in the contract.
Employee entitlements, contracts, and other commitments can be handled through separate agreements or adjustments within the sale contract.
In a share purchase, you acquire the company itself. This includes all its assets, liabilities, history, and contractual obligations. While this method can simplify some transitions, it can expose the purchaser to hidden risks unless due diligence is thorough.
Regardless of whether the purchase is structured as an asset or share deal, proper due diligence is critical. This includes legal, tax, and operational reviews. It also ensures your business structure moving forward supports asset protection and succession planning.
If you would like to speak to someone about your business, email us, contact your state broker, or call 1300 33 18 14.