2. Decide on a Structure for the Purchase
The structure of the purchase means the most basic aspects of the deal: who will be buying and selling; whether shares or assets will be bought; what price will be paid; and when and how that amount will be given to the seller.
A. Who Will be Buying and Selling, and will it be Shares or Assets?
Most businesses are operated by private companies. This means that, in most cases, all the important items associated with any business – like the inventory, the trademark, and so on –will be owned by a company. As a result, when you buy a business you will first need to decide:
who will be buying the business – will it be you personally or you through your own company; and
what will be bought – will your buy the shares of the company that owns the business or the business assets directly.
In nearly every case, it makes sense for a buyer to make the purchase through a company. There are tax benefits to operating a business through a company. It also limits the business risks to whatever else is owned by the company while putting your personal assets out of reach of creditors of the business.
2. Decide on a Structure for the PurchaseThe structure of the purchase means the most basic aspects of the deal: who will be buying and selling; whether shares or assets will be bought; what price will be paid; and when and how that amount will be given to the seller.A. Who Will be Buying and Selling, and will it be Shares or Assets?Most businesses are operated by private companies. This means that, in most cases, all the important items associated with any business – like the inventory, the trademark, and so on –will be owned by a company. As a result, when you buy a business you will first need to decide:who will be buying the business – will it be you personally or you through your own company; and what will be bought – will your buy the shares of the company that owns the business or the business assets directly.In nearly every case, it makes sense for a buyer to make the purchase through a company. There are tax benefits to operating a business through a company. It also limits the business risks to whatever else is owned by the company while putting your personal assets out of reach of creditors of the business.
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