YouTube video – https://youtu.be/hVxDYWsggQY When it comes to different types of acquisition agreements there are two options involved for the buyer and seller. An acquisition agreement is a crucial part of the process when one entity (whether a company or a person) acquires a business.
The first one and the most common one is called the Asset Purchase Agreement. In this agreement, the buyer purchases all of the business’s assets. Both its tangible property (inventory, real estate, office equipment, etc.) and intangible property (copyrights, patents, trademarks, clients, contracts, and trade secrets).
The second one is Stock Purchase Agreement. In this agreement, the buyer purchases the business entity by buying majority if not all of its stock. This includes all the assets of the company including the existing company name and corporation.
There are two major issues to consider when choosing which direction to go towards. Mainly taxes and liabilities for debts and obligations. For Tax purposes, an asset sale is usually better for the buyer because the buyer can begin depreciating the assets sooner. The seller usually prefers a stock purchase because the seller pays taxes only at the low long-term capital gain rate.
There are several other factors involved which I would be happy to discuss with you. You can easily contact me here – https://gillagency.co/contact-us