How to Buy a Business's Shares & Assets (2024)

FAQs

Can you buy a share of a business? ›

To buy shares in a company either an existing shareholder has to give up or sell their shares, or the company will need to create new shares. However, the creation of new shares will impact the shares already in existence as the total always has to be 100%.

They are the two core methods for buying or selling a business. An asset purchase requires the sale of individual assets. A share purchase requires the purchase of 100 percent of the shares of a company, effectively transferring all of the company's assets and liabilities to the purchaser.

One advantage of purchasing business assets is that the buyer is left with far fewer responsibilities than if they purchased shares. By choosing this acquisition process, the buyer elects not to continue the legal structure of the business, and therefore does not bear responsibility for the company's past.

What's the Difference? Generally speaking, an asset purchase is when an individual, either with an existing entity or by forming a new entity (LLC or Corporation), buys the assets of a business without buying the business itself. Asset Purchases entail buying everything that the business owns (the Assets).

Shares can be purchased through a Direct Stock Purchase and Dividend Reinvestment Plan sponsored and administered by Computershare Trust Company, N.A. Details about the Computershare Investment Plan, including any fees associated with the Plan, can be viewed and printed from Computershare's website.

A corporation can't be a corporation without at least one share of stock. So you must have at least one shareholder, and one share of stock. You can have (authorize) as many shares of stock as you want, however, this may increase your filing fees in some cases.

With an asset purchase, you will not take on all liabilities in the same way as a share purchase. You may pick and choose what assets you would like to acquire and will have more control over what you take from or what liabilities you assume of the existing business.

In an asset purchase, the buyer will only buy certain assets of the seller's company. The seller will continue to own the assets that were not included in the purchase agreement with the buyer. The transfer of ownership of certain assets may need to be confirmed with filings, such as titles to transfer real estate.

A share purchase agreement is a legal document used to transfer ownership of a company's shares from the seller to the buyer. It is an important document that outlines the terms and conditions of the sale, including the purchase price, payment terms, and any warranties or representations made by the seller.

The main disadvantage is that an acquirer receives neither the “step-up” tax benefit nor the advantage of handpicking assets and liabilities. All assets and liabilities transfer at carrying value. The only way to get rid of unwanted liabilities is to create separate agreements wherein the target takes them back.

How do I start acquiring assets? ›

A good piece of advice to investors is to start with simple investments, then incrementally expand their portfolios. Specifically, mutual funds or ETFs are a good first step, before moving on to individual stocks, real estate, and other alternative investments.

The owners of a business are the people who own its assets. They can own these in different forms, but generally they purchase them as shares and hold on to them until it is no longer profitable to do so.

Contractual Liability: If the buyer expressly agrees to assume specific liabilities of the seller in the asset purchase agreement, they become contractually liable for those obligations. It is essential for small business owners to carefully review the agreement and understand the extent of the assumed liabilities.

In most cases, buyers purchase assets and leave the seller the liabilities. The seller uses the profit from the sale to wind up the business and pay off the liabilities and debts. There may be instances where the buyer handles future liabilities, such as taxes or product liability lawsuits.

An asset acquisition is the purchase of a company by buying its assets instead of its stock. In most jurisdictions, an asset acquisition typically also involves an assumption of certain liabilities.

Generally, individual investors take an equity stake in a small business, allowing them to share in the profits and growth of that company.”

If you've decided you want to buy a percentage of the business, write up a basic offer and send it to the existing owners. Let them know that you're interested in buying a percentage of the business, and what kind of role you see for yourself. This is a basic, introductory letter.

Any shareholder has a percentage ownership in the company, determined by dividing the number of shares they own by the number of outstanding shares.

As an investor in a company, you own a portion of the company (no matter how small that portion is); however, this doesn't mean that you own property of the company.