There can be a number of reasons a business may choose to restructure. Including the plan to sell the business , merge, grow, develop into new markets, or prepare for a management buy-out. This could mean that part of the business needs to be transferred...
If you are thinking of buying or selling a limited company, one of the first decision you have to make is to decide whether you want to sell or purchase the assets or the shares.
During the share sale of a company the new buyer takes ownership of the existing business and continues to run it with its contracts, employees and premises intact.
The buyer replaces the owners of the company as a shareholder and a director. As a result, there is no transfer of company assets and no third party involvement is necessary.
This also means that the buyer will take on the liabilities of the business, including company debt. As the level of risk for the buyer is greater in a share sale, when compared to an asset sale, the process and the documentation will be more in-depth. The contract will require more guarantees and tax covenants to cover the buyer against any liabilities the company might have.