How to Use an F Reorganization When Buying a Business

From a tax perspective, an asset deal is generally to the buyer’s advantage. An equity deal, on the other hand, deal robs the buyer of that advantage. What should you do if you have to structure your deal as an equity deal?

From a tax perspective, an asset deal is generally to the buyer’s advantage. An equity deal, on the other hand, deal robs the buyer of that advantage. What should you do if you have to structure your deal as an equity deal?

In a traditional rollover, the buyer forms a new company to purchase all or substantially all of the assets of a target company.

In most SMB deals, working capital is the primary adjustment. But there are also other common adjustments.

A buyer can propose several adjustments to the purchase price. Let’s start with working capital.

From the seller’s perspective, the purchase price is (somewhat obviously) key.

From the seller’s perspective, the purchase price is (somewhat obviously) key.

Stock vs Asset Purchase When Buying a Business

Most small business sellers engage brokers to help them value and market their businesses. Yet beyond that role, some brokers also provide standardized legal documents, like form Letters of Intent (LOIs) and form purchase agreements.

In the normal course, before a seller completely opens the company drawers to diligence, the parties will negotiate a Letter of Intent (LOI)–a largely non-binding document that memorializes the parties’ preliminary understanding of the deal.

The best way to understand the process of buying a business is to view it from the top down. How does a deal unfold from start to finish? What steps do you need to take and in what order?

Read SMB-Transactions, and increase the likelihood that you successfully close more deals.